Hundreds of businesses across Worcester are still in ‘significant’ financial distress, according to a new report from a national insolvency firm.

According to Begbies Traynor, Worcester has seen a two per cent year-on-year increase in the number of struggling businesses - now 916 with real estate and property companies among those most affected.

The Red Flag Alert data for Q1 2019, which monitors the financial health of UK companies, reveals that nationally, 484,000 UK businesses are in significant financial distress, giving rise to concerns that the UK could suffer a broader economic slowdown during 2019.

Companies involved in buying, selling and letting property took much of the hit with a 16 per cent increase in struggling companies compared to the same period last year.

When looking at the sector landscape for Worcester firms in significant financial distress, real estate and property companies saw an increase of three per cent year-on-year but a more significant jump of 14 per cent since the end of last year while retail was also up by five per cent.

Some sectors in Worcester are showing signs of stability, with the number of automotive and construction companies in significant financial distress falling since 2018.

Brett Barton, partner at Begbies Traynor in Worcester, said: “Many businesses in Worcester are in limbo and are deferring major investment decisions.

"This, combined with consumers holding back on big ticket purchases, has resulted in increasing significant distress across many sectors, not least in terms of house purchases and high street activity.

“This trend is reflected in our latest Red Flag research, which clearly shows both business and consumers have taken a cautious approach and limited their exposure.

“Worryingly, the data also shows that this economic malaise appears to be indiscriminate across multiple sectors, so needs to be stopped in its tracks by a combination of political certainty and a commitment to support UK business, particularly SMEs which are the ‘engine room’ of the economy.”

Begbies Traynor's final quarter report for 2018 showed that 900 businesses were in serious financial distress in Worcester, with the support services and IT sectors faring the worst, the number of companies considered to be in distress having increased by 8 per cent during the quarter.