UK businesses enjoying low distress and high growth, report finds

There is a low level of distress among UK businesses, along with high levels of growth, the Business Distress Index has reported.

While 68 per cent of businesses showed one key sign of growth, the number is not representative across the country, with numbers lower in the north than the south. The case is the same with distress, with the levels at 34 per cent in the south, and jumping to 43 per cent in the north.

So even though continued levels of business distress remain low and growth is staying at a record high, there is a growing discrepancy between the north and south, which may indicate an economic divide.

Giles Frampton, president of the insolvency trade body R3, which runs the index, remarked in the press release of the ongoing positives being found. He said: “It’s encouraging that business growth isn’t yet showing signs of decelerating and the pace of the recovery is being kept up.”

The index also tracks businesses for decreases in profits, sales volumes and market share, or heightened use of maximum overdrafts, and Mr Frampton warned of not “over-stretching” your company. He added: “If a business runs before it can walk then problems can emerge.”

The index shows a rise in businesses dipping in to their maximum overdraft, which may be a sign of desperation in using up every last penny to continue growth and expansion.

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