The number of Northern Ireland companies showing signs of ‘advanced or critical distress’ has soared by 64% over the last year, with 930 businesses currently at risk of pulling down the shutters, new data shows.
The latest Red Flag Alert from independent business rescue and recovery specialist Begbies Traynor reveals that the distress signals are being raised in the north faster than in any other UK region.
It comes as separate data from the Department for the Economy shows that number of firms going bankrupt in the north has jumped from 104 in 2020/21 until 2024/25
Begbies Traynor says that in the third quarter of this year, more than 12,100 businesses in the north suffered from early or ‘significant’ financial distress – a rise of 21.6% on the same period in 2024, and a 16% increase since the previous quarter.
The Red Flag Alert data shows that across the UK as a whole there was a 14.8% rise in significant distress year-on-year and a 9% increase from quarter two, with 726,600 businesses now in significant distress.
Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland, said: “Businesses in Northern Ireland and across the UK are continuing to struggle in the face of ongoing issues, including the worst inflation of any G7 country.
“Although there was a very slight growth in GDP in August, retail sales grew and inflation was lower than expected, the economy is moving forwards slowly. As well as the problem of stagnating real wages, there is the added worry of rising unemployment which could set pressure on consumer spending.
Thomas McKay, managing partner for Begbies Traynor in Northern Ireland, added: “After such a challenging few years for businesses, we are continuing to see an increasing number of firms struggling in the face of ongoing inflation as well as global trade uncertainty.
Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland
“Unfortunately, levels of early distress in Northern Ireland are growing more quickly than those across the UK as a whole and we urge business owners to prepare for the tough economic climate to continue – it is vital that they keep a very close eye on finances and seek professional support at the first sign of problems when advisers will have more tools available to help them to prevent problems from escalating.”
In terms of significant distress, in Northern Ireland almost all of the 22 industry categories monitored by Red Flag Alert saw increases in quarter three compared with the same period the previous year.
Since the previous quarter, the worst affected sectors were travel and tourism with a 84.6% hike, affecting 72 businesses; and manufacturing, up by 64.8%, affecting 519 businesses.