In yesterdays blog we looked at the crisis in consumer confidence which is pervading our shores here in Northern Ireland, but today we are looking on the bright side and checking out the latest news that businesses here are performing rather better overall than businesses in the rest of the UK.
Businesses Showing A Great Deal Of Resilience
The latest figures, which have been gleaned from the independent businesses and recovery specialist Begbies Traynor, show in their Red Flag Alert data that in Northern Ireland there is about the same percentage of businesses showing critical distress as at this time last year. Whereas the UK as a whole showed an increase of a whopping 37%.
Likewise this type of distress had fallen by 8% over here in the 2nd quarter of 2022 compared to the 1st quarter. But the UK as a whole had shown a 3% increase, so clearly our businesses are showing a great deal more resilience which is good to see.
We Need To Be Prepared For Some Tough Times Ahead
Lawrence O’Hara of Begbies Traynor is quoted on this subject in the Belfast Newsletter, saying:
“While it is good news that in the latest quarter Northern Ireland appears to have performed better than some other parts of the UK, in terms of instances of both advanced and early distress, the economic picture here and across the UK is increasingly worrying. With ongoing questions over Brexit, combined with spiralling energy costs and continuing supply chain disruption with further lockdowns in China, it is likely that businesses need to be prepared for some more tough times ahead.
“Given the escalating cost of living crisis, these latest figures are not as bad as some had feared, however, we believe that the impact of rising inflation is yet to be truly felt. The latest GDP figures for May already show a downturn in consumer-facing services with both retail sales and sports activities and recreation falling. As the winter approaches, more people will struggle to pay household bills as they face further energy rises and, in turn, businesses will bear the brunt as consumers cut back on non-essential spending. In such a challenging economic environment, it is more important than ever that businesses keep a close eye on cash flow and turn to professional advice as soon as financial problems become apparent.”
So we have a right to be cautiously optimistic about the future but we need to be vigilant. If you think your business could benefit from some independent financial advice please get in touch with our team on 028 3752 2909.