The economic health of the UK has been constantly in question over the past few years, and with good reason. But will we avoid the dreaded triple-dip recession? The latest figures from the Begbies Traynor Red Flag research for the first quarter of 2013 show that, fingers crossed, the economy will narrowly avoid a triple dip. However, though it seems that we’ve hopefully turned a corner, there are still many obstacles to overcome.
This research monitors the financial health of corporate UK and shows that recovery is continuing, with a recorded 34% decline in critical financial distress when compared to the first quarter of 2012. Across all sectors, the number of UK businesses experiencing critical financial problems fell from 5000 in Q1 2012 to 3283 in Q1 2013. This shows that the UK may have indeed turned a corner when it comes to recovery.
This is a generally positive prediction, though on the whole it has been lead by improvements in the UK’s business services sector. It therefore masks a cloudier picture coming from other areas of the UK market. Sectors focused on the customer economy, such as retail, leisure and media, as well as real estate, have in fact seen an increase in financial distress over the same period.
Julie Palmer, Partner at Begbies Traynor, commented; “This year on year improvement reflects the continued forebearance and benign monetary conditions facing UK businesses today, combined with an improving credit environment, albeit primarily for larger corporates. Business confidence is slowly returning in the form of greater business spending on both services and investment.”
This credit environment is something that is impacting on small businesses. While improving credit conditions for larger companies are starting to have a positive effect, it’s now important for the same opportunities to be made available to SMEs. With alternative finance, including invoice factoring, this can be a reality.