BUSINESSES in the Bournemouth area face a “troublesome autumn” in which struggling firms are finally overwhelmed, an insolvency expert has said.

The number of local businesses in significant distress held steady at 1,746 in the second quarter of this year – but analysts say key sectors are continuing to struggle.

The figures come in the Begbies Traynor Red Flag Alert, which monitors the financial health of companies. The figure for significant distress is 16 per cent down on last year, when government support for businesses was still in place.

Professional services and construction saw the biggest quarterly increases in significant distress – a six per cent rise for professional services and two per cent for construction.

Nationally, the research saw 582,452 businesses in significant distress amid rising inflation, labour, material and energy prices, and faltering consumer and business confidence.

County court judgements (CCJs) were up five per cent on the previous quarter, to 46,235 nationally, with the figure driven higher as courts clear backlogs and debts are pursued. There were only 59,042 CCJs during the whole of 2021

Julie Palmer, partner at Begbies Traynor in Bournemouth, said: “While the number of Bournemouth companies in distress is currently stable, a combination of economic issues are taking their toll to reduce both business and consumer confidence.

“Many businesses are fighting on in a climate of rising costs, but the environment is only going to get worse, not better, at least until next year. I fear that it will be a troublesome autumn as businesses which have struggled for so long are finally overwhelmed.

“That is why it is so important that any businesses facing financial difficulties, for whatever reason, should seek professional advice in order to fully understand the options available.”

As previously reported, seasonally adjusted figures for corporate insolvencies rose 12.6 last quarter compared with the period before. The total of 5,629 was 81.3 per cent up on the same period last year and the highest since 2009.

The Red Flag Alert draws on a range of legal and financial data to measure corporate distress.

Businesses defined as being in “significant distress” have minor CCJs, of less than £5,000, filed against them, or have been identified by Red Flag Alert’s credit risk scoring system, which takes into account signals such as working capital, contingent liabilities, retained profits and net worth.