Financial distress among businesses in Shropshire shot up sharply in the final three months of 2017 compared to the same quarter of the previous year, new figures have shown.

Around 3,000 businesses in the county have faced some level of financial distress in Q4 2017 compared to 2,214 during the same period 12 months ago, data released by the UK’s leading independent business recovery specialists Begbies Traynor reveals – an increase of 36 per cent.

The research comes from Begbies Traynor’s Red Flag Alert for Q4 2017, which monitors the financial health of UK companies.

“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,” said Gareth Prince, partner at Begbies Traynor’s Birmingham office.

“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.”

Nationally, 493,296 firms reported ‘Significant’ financial distress in Q4 –a hike of 36 per cent on the same period last year. In the Midlands as a whole, 59,935 firms faced ‘Significant’ financial distress in the final quarter of the year, compared to 44,933 the previous year –an increase of some 33 per cent.

The trend was reflected in Shropshire, where among those sectors faring worst were construction (up to 456 from 338, a rise of 35 per cent), automotive (a rise of 53 per cent from 89 to 136), industrial transportation and logistics, where numbers went up from 61 to 80, and financial services (rising 58 per cent from 33 to 52).