British companies have significantly deteriorated in the first quarter, with 484,000 at the end of March were in financial distress due to the economic uncertainty.
Date from Begbies Traynor found the number of business in “critical” financial distress that are on the verge of insolvency has risen 17% year on year.
Financial services had a 5% increase of the number businesses in financial distress to 12,728, as they are being affected by the lack of clarity over the UK’s departure from the EU.
The construction industry has been struggling as the number of distressed involved in building projects rose 10% to 13,018 for the same period.
The leisure and culture industry reported a 9% and 4% rise in the number of distressed businesses respectively.
Julie Palmer, partner at Begbies Traynor said, “Many UK businesses are currently in limbo and deferring major investment decisions.
“This, combined with consumers holding back on big-ticket purchases, has resulted in increasing significant distress across many sectors.”
Ric Traynor, executive chairman of Begbies Traynor Group said, “We have heard from businesses that Brexit uncertainty has been a hindrance to business growth and investment.
“There has already been a number of high-profile firms announcing their decision to invest in other countries, which not only impacts regional economies, but also the SME supply chain.”