NEARLY 2,000 companies in Bournemouth are in ‘significant’ financial distress, new figures show.

There are 1,942 businesses in the town that are at risk of economic failure, according to insolvency firm Begbies Traynor’s Red Flag Alert, which monitors the financial health of UK companies.

This represents a quarterly increase of 4.1 per cent and an annual rise of 27.2 per cent.

The data shows the speed at which financial distress has accelerated over the past 12 months, with economic challenges putting considerable financial pressure on businesses.

The Red Flag Alert also highlights sector hotspots, with the construction and support services sectors seeing annual increases of 48.3 per cent and 45.4 per cent respectively in the number of companies in significant financial distress.

Julie Palmer, partner at Begbies Traynor in Bournemouth, said: “The macroeconomic conditions that made last year so difficult have continued to exert unrelenting pressure on corporate balance sheets. Despite some optimism as we entered the new year, 2024 has so far been characterised by a continuation of the same pressures that plagued companies in the UK throughout 2023.

“As a result, this latest data shows a marked increase in firms moving towards insolvency compared to the same period last year.

“Unfortunately, there’s no quick fix for our economy, and with inflation falling slower than expected, hope of a significant fall in interest rates in the near future seems to be fading.

“Sadly, the pressing issues facing many businesses today will simply push many over the edge and contribute to the current high level of UK corporate insolvencies.”

Nationally, the research for Q1 2024 recorded 554,554 companies in significant distress, a 30.8 per cent increase from the same period in 2023.

The number of businesses in ‘critical’ financial distress has grown 20.1 per cent compared to the same period in 2023, with 40,174 UK businesses affected.

Historic data indicates that a large percentage of the businesses in significant financial distress are likely to progress towards critical financial distress and potential insolvency.

For more information, visit the Begbies Traynor website.