Business rescue specialists Begbies Traynor said there were 9,500 firms in the province in ‘early’ or ‘significant’ financial distress in early 2025 – a rise of nearly 6% on the same period in 2024.

And companies in hotels and accommodation accounted for more than 50% of those in early financial distress.

However, the numbers across all sectors facing early distress were down 12.5% on the final quarter of 2024. The research for the firm’s quarterly Red Flag report was carried out before the announcement of tariffs by the US in early April.

In Northern Ireland, ‘critical’ or more advanced business distress saw a slight uplift of just under 1% in the first three months of 2025 compared with the same period of 2024, with 725 firms in the province affected.

Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland, said: “Despite some encouraging economic news at the start of the year – with stronger growth than had been predicted and the rate of inflation dropping to 2.6% in March – our latest Red Flag data paints a far gloomier picture with many more businesses in the province already experiencing signs of financial distress.

“Given that the report pre-dates the upheaval caused by the announcement of Trump’s global trade tariffs, many experts fear that the ongoing uncertainty will further dent consumer confidence and push businesses closer to the edge.

“In such a fragile economic environment, owner-managed businesses must keep a close eye on their finances and seek professional advice as early as possible as this will increase their options for refinance, restructure and revival.”

Hotels and accommodation companies accounted for 51.6% of those in early distress in Northern Ireland, with professional services firms accounting for 14.2%, general retailers 14% and food and drug retailers 12.8%.

The only industry sectors which reported decreases in significant distress were printing and packaging, travel and tourism, utilities and financial services.

Cases of critical distress had mounted in most sectors here, with media, accounting for 24 firms, bars and restaurants, accounting for 42 businesses, and food and drink, comprising 14 companies, among those worst affected.

Mr O’Hara added: “With inflation predicted to rise again next month amid escalating household bills, together with a worsening global outlook, this may well be the ‘calm before the storm’.

“Despite the UK entering the latest crisis in a reasonable shape, businesses are one again unlikely to be able to operate in the stable environment they need, but rather they should be prepared for a rocky journey ahead.”