Northern Ireland is the only UK region to have seen year-on-year reductions in both ‘critical’ and ‘significant’ financial distress, an industry barometer shows.
The second quarter of this year saw 819 instances of critical financial distress recorded in Northern Ireland, according to findings in the latest Red Flag Alert data from independent financial and real estate advisory group BTG (formerly Begbies Traynor).
That’s drop of 2.6% compared with a year earlier, countering a UK average rise of 9%.
In the period to June 30 there were 10,153 instances of ‘significant’ or early-stage financial distress, a year-on-year reduction of 2.9%, results which have been welcomed by business distress experts at BTG.
But the quarter two data showed that there were still pockets of hardship in some key sectors, with sport & health clubs (+24.7%), media (+7.8%), wholesale (+5.4%) and industrial transportation & logistics (+3.8%) seeing the most notable year-on-year increases in significant financial distress.
Twelve sectors saw also a rise in levels of critical financial distress over the period, including wholesale (up 160%), professional services (+83.3%) and telecoms/IT (+43.3%).
Thomas McKay, managing partner for BTG in Scotland and Northern Ireland, said: “The trends here are countering the wider averages and that is very good news for the economy and employment in Northern Ireland as a whole.
“But as ever there are winners and losers, and not every business or sector will be seeing an improvement in trading conditions.
Thomas McKay, managing partner for BTG in Scotland and Northern Ireland (RICHARD_CAMPBELL)
“Dramatic increases in year-on-year critical distress levels in wholesaling, travel and tourism, professional services and telecoms point to acute financial pain in those sectors in the months ahead.
“The less immediate significant distress measures show where problems might be looming on the horizon. Rising levels in sport and health clubs, media and wholesale points to reducing consumer spending, hurting certain sectors in the year ahead.”
He added: “While these latest figures are encouraging compared to the UK average, firms in several key sectors of Northern Ireland’s economy still face significant challenges in the months ahead.”