Firms face a long, cold winter ahead

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BUSINESSES in the Portsmouth region will face a stern test this winter as the cold wind of a continuing recession blows through the south’s economy.

That’s the verdict in the latest Begbies Traynor Red Flag Alert, the quarterly report which monitors a series of indicators of company distress.

It measures the numbers of companies with critical problems, such as winding-up orders, and significant problems, such as those with court orders against them.

While the number of firms with these problems in the south east has decreased from the second quarter to the third, dropping three per cent from 29,155 to 28,244, the region still has the highest number of problems in the UK.

In Portsmouth itself, the number of companies with significant problems increased by 27 from 191 in the second quarter to 218 in the third.

But the number of firms with critical problems dropped by 38 per cent, from 13 to eight.

Julie Palmer, a partner at Begbies Traynor’s Portsmouth office, said the national picture identified a growing north-south divide in the levels of business distress and evidence of the impact of public sector cuts starting to hit home.

She added: ‘There has been a material increase in problems in the past quarter across the north east, north west, Yorkshire, the midlands, the east of England and Wales compared to decreasing distress in London and the south east, according to the figures.’

Around 111,000 public sector jobs disappeared in the second quarter.