A RISING number of businesses in the Bournemouth area are in “significant” financial distress, research has found.

The support services and professional sectors were showing the highest rates of stress in the area, according to business recovery specialist Begbies Traynor.

The number of businesses struggling in Bournemouth grew one per cent between the second and third quarters of 2019 to 2,471 – a four per cent rise year-on-year.

There was a six per cent quarterly rise in the number of support services business in distress, while for the professional sector the rise was three per cent.

However, some parts of the local economy showed “tentative signs of stability”, with construction and the health and education sectors both recording a six per cent drop in businesses in distress.

Julie Palmer, partner at Begbies Traynor in Bournemouth, said: “Three years on from the referendum, the latest Red Flag research highlights just how businesses are struggling as a result of uncertainty.

“Much investment is on hold as businesses wait to see what the state of play will be post-Brexit and whether the agreements or contracts they currently have in place will still be valid following the expected withdrawal.

“This is stifling growth both in Bournemouth and nationwide.

“What’s clear is that until businesses and consumers alike are given clarity on the economic situation post-Brexit, stagnation will remain the norm and productivity will continue to suffer.”

Begbies’ Red Flag Alert data, which monitors the financial health of UK companies, reveals that nationally, 489,000 UK businesses are in significant financial distress, with the real estate, construction, retail and travel sectors the most severely affected. That was a rise of 22,000 businesses since the same period last year.

The number in financial difficulty nationally has risen 40 per cent since the EU referendum more than three years ago.

The Red Flag Alert has been measuring corporate financial distress since 2004.

It draws on legal and financial data from a range of sources, including intelligence from Begbies Traynor’s insolvency business.

Its definition of businesses in “significant” distress includes those with county court judgements of less than £5,000 filed against them, as well as those which have been identified by Red Flag’s credit risk scoring system.