MORE than 2,000 businesses in Bournemouth are in ‘significant’ financial distress, new figures show.

The latest ‘Red Flag Alert’ figures from Begbies Traynor showed that 2,045 businesses in the town were in ‘significant’ distress, which represents a 33.7 per cent annual increase.

Begbies Traynor monitors the financial health of UK companies, and said weakness in consumer confidence, plus ongoing economic concerns, are putting considerable pressure on businesses in Bournemouth.

This figure is also an increase of 5.3 per cent, with 334 telecoms and IT businesses in significant distress, representing the most troubled sector.

Significant increases have been seen in the support services and construction sectors, with annual increases of 51.1 per cent and 45.7 per cent, respectively.

Julie Palmer, partner at Begbies Traynor in Bournemouth, said: “It looks like 2024 will prove to be another tough year for businesses.

“We are a little over halfway through the year and the macro-economic environment remains extremely testing, with the latest Red Flag Alert data highlighting a substantial increase in the number of businesses in significant financial distress in comparison to this time last year.

“A continuation of falling inflation levels will be especially helpful for businesses, particularly if interest rates begin to inch backwards later this year.

“Beyond these small glimmers of hope, all eyes are now on our new Government as we ask ourselves what they can do to kickstart economic growth in the UK. However, the reality is that the Government may not be able to act fast enough to stop many struggling businesses from succumbing to the economic pressures with which they are currently grappling.

“In short, the prevailing economic situation means that we still expect to see heightened levels of company insolvencies extend into 2025 and beyond.”

Nationally, the Red Flag Alert research for Q2 2024 showed 601,950 businesses in significant distress, which is 36.9 per cent higher than the same period in 2023.

The number of businesses in ‘critical’ distress, meaning they are likely to go into insolvency in the next 12 months, reached 40,613 in Q2, increasing by 34.5 per cent.

This is driven by increases in sectors such as automotive, transportation and logistics, and hospitality.