Good news for creditors in the East Midlands: signs of business distress in the Midlands appear to have fallen over the last quarter, but so have signs of reported economic optimism and growth, according to indicative research by the local branch of R3, the insolvency and restructuring trade body.
Of a sample of the region’s businesses surveyed in December, only 12% reported at least one of five key indicators of business distress (decreased profits, a reduction in sales, regular use of the maximum overdraft limit, a fall in market share, or making redundancies). This compares to 30% in September 2017, up from 20% in April 2017 and 22% in September 2016.
However, businesses should remain vigilant. The statistics, which form part of a long-running survey of business distress by R3 and BDRC, also point to a downturn in business growth over the past quarter. Only 59% of Midlands businesses report at least one key sign of growth, compared to 65% in September 2017 and 63% in April 2017. Such signs include increased sales or profits, investment in new equipment, market share growth and business expansion.
R3 says that economic optimism is also continuing to falter with 25% of the region’s businesses now reportedly more pessimistic than they were three months ago. Furthermore, only 44% of the region’s firms expect their activity to increase in 2018.
These are undoubtedly uncertain times for those owed money, but, as we reported in our last blog, the number of ‘zombie businesses’ (those only paying the interest on what they owe) has dropped to an all-time low, and this points to better news for creditors.
As ever, if you’re concerned that your bills aren’t being paid on time, give us a call.