Zombie businesses have been big news in the wake of the latest recession with numerous companies limping on with no secure future. Recent figures from Company Watch have revealed the extent of the issue.
According to the data, the UK has seen a 108 per cent rise in the number of zombie companies operating in the last five years. These firms represent as much as £70 billion in negative equity, posing a serious risk to the health of the economy.
Zombie companies are defined in Company Watch's study as those with debts greater than their assets and according to the data, they have increased from 109,000 in 2008 to over 227,000 in 2013.
Nick Hood, business risk analyst with the firm, commented: "The problem with this ever-growing army of zombies goes well beyond any immediate threat of insolvency. These struggling businesses distort fair competition right across the economy as they underbid for contracts in their desperate ongoing battle to generate cash to keep their creditors at bay."
He added that sectors like construction are facing particularly dangerous futures due to 'suicide pricing', which is "depressing the profitability of the entire industry".
On the upside, some of these firms represent viable opportunities for savvy business buyers if they are prepared to turnaround their fortunes with hefty investment and a solid business plan.
Mr Hood added that some of the zombie companies limping on at the moment will be hit by rises in interest rates and activity levels, while others will be able to "trade themselves into stronger positions" as the economy improves. 
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