ALMOST 2,300 Bournemouth businesses are in “significant” distress – an increase of almost half since the start of last year.

The real estate and property sector and the construction industry were among the sectors under the most strain, according to research by insolvency firm Begbies Traynor.

It found there were 2,294 Bournemouth businesses in significant financial distress between January and March this year – up 45 per cent on the same period last year and up 19 per cent on the fourth quarter of 2020.

That was despite the billions ploughed into supporting businesses through the Covid crisis via the furlough scheme, grants and loans.

Nationally, Begbies’ Red Flag Alert research showed 723,000 businesses in significant distress, up 42 per cent year-on-year. The 15 per cent rise on the previous quarter is the largest rise since the report was launched in 2014 – equating to 93,000 ailing businesses.

In Bournemouth, distress rose 29 per cent in the real estate and property sector and 26 per cent in construction, compared with the previous quarter.

Julie Palmer, partner at Begbies Traynor in Bournemouth, said: “This huge increase in financially distressed companies in Bournemouth shows that the last 12 months have undoubtedly been some of the hardest that many businesses have encountered.

“We must remember that this is no ordinary recession and while some businesses have had significant assistance from central government, large parts of the economy have had to function with their doors closed to their main source of custom. With the reopening of the economy over the next few months, there is a lot of work for many businesses to do, but those that have the talent to thrive in normal circumstances will find a way to adapt.

“The pandemic has changed customer expectations and behaviours potentially permanently, and those businesses that were profitable pre-Covid-19, and can demonstrate a strong recovery plan, can survive.”

Begbies considers a business to have significant problems if a county court judgment of less than £5,000 has been filed against it, or if it has been identified by the Red Flag risk scoring system, which screens for a marked deterioration in key financial ratios, including those based on working capital, contingent liabilities, retained profits and net worth.

Insolvency experts have predicted a large rise in business failures when existing government support is tapered out during this year.