The stark reality for businesses in Swindon has been laid bare in a new report. 

More than 1,000 Swindon 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.

Weakness in consumer confidence, plus ongoing economic concerns, are putting considerable pressure on businesses across the town, with 1,063 at risk of economic failure. This represents a quarterly increase of 13.2 per cent and an annual rise of 57.3 per cent.

Looking at the sector picture, there are 172 construction businesses in significant distress in Swindon – a 70.3 per cent increase - making it the most troubled sector in the town.

There has also been a significant increase in the number of real estate and property businesses facing difficulties, with this industry seeing annual increases of 42.3 per cent.

In Swindon, the figures show 172 construction firms, 131 support services providers, 101 real estate companies, 99 telecoms and IT businesses and 80 professional services ventures are all 'in distress'. 

Nationally, the latest Red Flag Alert research for Q2 2024 recorded 601,950 businesses in significant distress, which is 36.9 per cent higher than the same period in 2023.

During Q2 2024, ‘critical’ financial distress also increased year-on-year by 34.5 per cent to 40,613 companies, with a large number expected to enter insolvency over the next 12 months.

This is being driven by notable increases in sectors such as automotive, transportation and logistics and bars and restaurants.

Commenting on the figures, Julie Palmer, partner at Begbies Traynor in Swindon, said: “It looks like 2024 will prove to be another tough year for businesses.

"We are a little over halfway through the year and the macro-economic environment remains extremely testing, with the latest Red Flag Alert data highlighting a substantial increase in the number of businesses in significant financial distress in comparison to this time last year.

“A continuation of falling inflation levels will be especially helpful for businesses, particularly if interest rates begin to inch backwards later this year.

“Beyond these small glimmers of hope, all eyes are now on our new Government as we ask ourselves what they can do to kickstart economic growth in the UK. However, the reality is that the Government may not be able to act fast enough to stop many struggling businesses from succumbing to the economic pressures with which they are currently grappling. 

“In short, the prevailing economic situation means that we still expect to see heightened levels of company insolvencies extend into 2025 and beyond.”