MORE than 400 firms across Yorkshire and the north-east are in deep trouble in the wake of the credit crunch, a survey has revealed.
Figures from insolvency firm Begbies Traynor show there were 405 companies with critical problems in the second quarter of 2008.
That is more than 22% up on the total of 328 companies on the critical list in the previous quarter and almost six times higher than the 53 in the second quarter of 2007.
The annual increase is the fourth highest in the UK.
Companies rated as ‘critical’ are those facing county court judgements totalling £5,000 or more or those facing winding-up petitions.
Meltham’s Peter Sargent, partner at the Halifax-based Begbies Traynor, said: “The combination of adverse economic conditions and tightening credit availability has had a serious impact on companies in the second quarter of 2008.
“This trend is expected to continue and will undoubtedly lead to more companies being pushed into insolvency over the coming months.”
Nationally, 4,258 companies faced critical problems in the first quarter of 2008 compared with 3,309 in the first quarter of the year and just 542 in the second quarter of 2007.
The worst-hit region was the south-east with almost 2,000 companies with critical problems during the second quarter of this year. But the highest percentage increases were in the north-west and Wales followed by the East Midlands.
Based on previous Begbies Traynor research, about 15% of companies experiencing the most difficult circumstances will enter into a formal insolvency procedure within 12 months.
