Oxford: 1,200 businesses in city 'in financial distress'

Slow economic growth in the final quarter of 2019 has left more than 1,200 businesses across Oxford in ‘significant’ financial distress, according to a new report from Begbies Traynor.

While Oxford saw a 1% decrease in the number of businesses struggling between Q3 and Q4 2019 – now 1285 – this is an increase of 3% on the same period in 2018.

The Red Flag Alert data for Q4 2019, which monitors the financial health of UK companies, reveals that nationally, 494,000 UK businesses are in significant financial distress - the highest number recorded by the research - with the real estate & property, support services, construction and retail sectors particularly badly affected. This is a rise of 81% since 2016, and a significant number of these companies were formed after 2014, demonstrating that younger businesses are the most vulnerable to failure.

When looking at sectors in Oxford that are in financial difficulty, real estate & property and leisure & cultural businesses are in the most distress – both increasing six percent between Q3 and Q4 2019.

More positively, the figures also revealed that some sectors in Oxford are showing tentative signs of stability during the same time period, with the number of troubled firms in construction and professional services down on the previous quarter.

Commenting on the figures, Julie Palmer, partner at Begbies Traynor in Oxford, said: “Businesses and the UK economy as a whole will want to avoid a repeat performance of 2019, where distress increased to record levels on the back of ongoing uncertainty around Brexit. These figures clearly demonstrate the impact of this indecision, so with political certainty and a clear Brexit path, businesses in Oxford should, at last, be able to plan for 2020 with a greater sense of clarity.

“However, the macro-economic climate is complicated, and we are seeing clear winners and losers, as evidenced by this latest Red Flag data. Currently, we do not know if the failing performance within some sectors is due to short-term confidence issues, or more fundamental economic and structural issues.

“The landscape of UK business is slowly changing. In order to capture the attentions of consumers and clients, businesses need to demonstrate that they not only have a compelling product or service at the right price, but also one that has strong environmental credentials to boot.”