The North of England is home to almost 30,000 businesses in distress, according to new research from the Institute for Turnaround (IFT) – representing over 1 in 25 of the total.
The IFT’s latest Societal Impact Report found that 28,576 businesses are in need of turnaround support in the North, which equates to 4.05 per cent of firms in the region, according to figures from Companies House. And the report says that inflationary pressures, labour shortages and rising interest rates and energy prices mean demand for turnaround expertise will continue to grow in 2023.
Last year manufacturing, technology and construction saw the largest increase in the number of firms in distress. The retail, automotive and casual dining sectors are forecast to be among the hardest hit as consumers tighten their belts this year, with manufacturing expected to remain the sector most in need of turnaround support.
Andy Leeser, chairman of the IFT, says: “The North is one of the UK’s economic powerhouses and our latest figures reveal that it has proportionately fewer businesses in need of turnaround support than the likes of London and the South East, Wales and the West of England.
“Nonetheless, our latest figures suggest that manufacturing – one of the North’s traditional strengths – and automotive sectors will actually be among the busiest for our members in the year ahead. In part this will be driven by a growing range of supply chain challenges.
“The directors behind UK businesses large and small, having risen to the manifold challenges of the COVID-19 Pandemic and associated lockdowns might have expected a period of calm to recover and rebuild. Instead, firms have found themselves faced with multiple new challenges.
“A cost-of-living crisis is hitting consumers, whilst a cost of doing business crisis is combining with pre-existing stresses to put a great deal of pressure on UK PLC.”
While it is true that inflation is predicted to continue falling from likely peaks reached towards the end of 2022, it is still expected to end the year well above the Bank of England’s two percent inflation target.
The IFT is the UK’s leading membership organisation for turnaround experts. Its members and corporate partner organisations help underperforming businesses avoid unnecessary insolvency, saving in excess of 80,000 jobs last year as initiatives to fix finances and revamp growth strategies bore fruit. Members also helped UK companies deliver more than £3.6 billion in shareholder value.