ALMOST 600 Milton Keynes companies are now classed as being in “significant” economic distress, according to the latest figures from Begbies Traynor’s ‘Red Flag Alert’, which monitors the financial health of UK companies.
Ongoing economic uncertainty, inflationary pressures and debt burdens, along with persisting weakness in consumer confidence, are all contributing to business stress in Milton Keynes, with 584 at risk of economic failure.
This represents a quarterly increase of 18.5%, and an annual rise of 63.1%.
Looking at the sector picture, there are 107 support services businesses in significant distress, making it the most troubled sector in the city.
There have also been significant increases in the number of construction and professional services businesses facing difficulties, with these industries seeing annual increases of 102.8% and 48.8% respectively.
Nationally, the latest Red Flag Alert research for Q3 2024 recorded 632,756 businesses in significant distress, an increase of 32.3% on the same period in 2023. Meanwhile, the number of businesses in ‘critical’ financial distress has decreased, with a quarterly fall of 23.2% to 31,201 and a year-on-year drop of 17.3%.
Julie Palmer, partner at Begbies Traynor in Milton Keynes, said: “There is no hiding from the fact that 2024 has been hard to navigate for companies and the final quarter looks no different, as a high degree of uncertainty weighs on the UK economy.
“While the decline we have seen in ‘critical’ financial distress at a national level is a welcome surprise after a challenging year, it is too early to say if this is a trend that will continue into the autumn – traditionally a busy period for corporate insolvencies.
“While there are tentative signs of a recovery, uncertainty continues to loom over Milton Keynes businesses. In response, many business leaders are holding their breath as they await clarity over what the forthcoming Budget will bring.
“With wider geopolitical issues also having an impact, the only certainty is uncertainty and we know this is bad for both business and investment alike.
“Combine this high level of uncertainty with the expectation of higher business costs post the Autumn Budget and it is clear that the economy is far from being out of the woods.”
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