THERE were 1,541 Bournemouth businesses reporting financial distress at the end of last year – up by more than a third from a year before.

The construction, media, bars, restaurants and automotive sectors fared worst, according to business recovery specialist Begbies Traynor.

Its Red Flag Alert for Q4 2017 found ‘significant’ distress rose among firms in all sectors and all parts of the UK.

It said 1,541 business in Bournemouth had faced some level of financial distress in the fourth quarter of 2017, compared with 1,122 in the same period a year ago – a 37 per cent rise.

In construction, there were 222 companies in distress, a 32 per cent rise. Media firms in distress rose 76 per cent to 74; bars and restaurants were up 21 per cent to 69; and automotive up 20 per cent to 42.

Nationally, 493,296 firms reported ‘significant’ financial distress in Q4 – up 36 per cent. In the South West as a whole, the figure was 38,525, up 32 per cent.

Begbies Traynor says a host of wider factors contributed to the rise. They included rising inflation, stagnant real wage growth, a weak pound, political uncertainty, November’s interest rate rise and tightening credit.

Julie Palmer, regional managing partner at Begbies Traynor’s Bournemouth office, said: “The number of UK businesses experiencing ‘significant’ financial distress during Q4 2017 is of real concern, as a perfect storm of macroeconomic headwinds pushed nearly 500,000 firms into significant distress.

“Our data shows that no region or industry has entered the new year unaffected, as the whole economy felt the combined drags of the inflationary environment, higher interest rates, growing business uncertainty, tighter credit availability and subdued consumer spending.

“When the overall business environment is so challenging, unfortunately there can be few real winners, however certain sectors of the economy are certainly feeling the pinch more than others. In particular, the vast UK support services sector saw a spike in distress as their stretched customers reined back spending, the construction industry saw the lowest levels of optimism in five years while the real estate sector felt the full impact of the increasingly stagnant UK housing market.”

Begbies found 258,349 UK businesses ended the year with a negative net worth, while another 154,251 experienced a worrying increase in their working capital deficit.

Ric Traynor, executive chairman of Begbies Traynor, said: “Prolonged exchange rate weakness undoubtedly hit some businesses hard last year and despite a recent recovery in Sterling, this improvement is yet to feed through in terms of any widespread recovery in corporate health. Meanwhile, the impact of continued political and economic uncertainty surrounding the ongoing Brexit negotiations cannot be underestimated.”