Cause for ‘cautious optimism’ in Lincolnshire despite gloomy forecast for UK economy

Amid growing fears of recession, and the escalating cost of living crisis, the latest data from independent business rescue and recovery specialist Begbies Traynor suggests some encouraging signs for Lincolnshire businesses, with the region performing more strongly than other parts of the UK in the second quarter of 2022.

The latest Red Flag Alert data, published today (5 August 2022) by Begbies Traynor reveals that in Lincolnshire significant’ or early-stage distress (which refers to businesses that have had CCJs of less than £5,000 filed against them) fell by 13% year on year and by 1% since Q1 of this year. The national average was a decrease of 11% since Q2 2021.

Across Lincolnshire 5,926 businesses experienced instances of early stage distress in the three months from April to June 2022. During the same period, over half a million firms across the UK as a whole, ran into financial difficulties.

Gareth Rusling, who heads Begbies Traynor’s Lincolnshire offices in Lincoln, Scunthorpe and Grimsby, said: “There are some encouraging signs for Lincolnshire that we are ahead of the national trend and seeing faster falls in the levels of business distress than the UK average.

“Nevertheless, the ongoing economic uncertainty we are all facing over the impact of Brexit, continued Covid lockdowns in China and supply chain problems, as well as soaring energy costs, certainly does not bode well for businesses.

“As ever, we are advising firms to get the right strategies in place now in order to increase their resilience to economic turbulence, and of course seek professional help sooner rather than later if they begin to experience financial difficulties.”

Sectors in Lincolnshire that had seen the biggest falls in distress since Q1 2022 include printing and packaging (-14%), utilities (-12%), hotels and accommodation (-6%) and financial services (-5%). Industries faring less well, and which had seen an increase in business distress since the previous quarter, include food and drug retail (+10%), automotive (+8%) and telecoms and IT (+7%). The sector with the largest number of distressed businesses was construction, with 1,011 Lincolnshire building firms affected.