Author: Paula Fagan, Marketing Manager

This is the second article in our Clarity series where we look at UK SME viability and vulnerability across sectors and regions to provide professional advisers and business owners with powerful insights. In this article, we examine SME distress analysis by region.

The wider view

Current economic challenges are hitting businesses hard, with an increasing number of SMEs facing insolvency. Creditsafe reported a 5% rise in the number of insolvencies in August 2023 when compared to July 2023. This represents a 22% increase on August 2022 levels.

According to Creditsafe, the number of UK company insolvencies for 2023 rose to 19,825 in August. This represents a 15% increase when compared to the same period in 2022, and it denotes a 47% increase on 2021.

As UK company insolvencies are on the rise, it is even more important for businesses to take action in the areas within their control. Interventions can help ensure that the SME sector is in the strongest possible position to withstand further economic turbulence.

Drilling into the regions

Our Clarity distress research identifies SMEs at increased risk across three alert categories, focusing on those SMEs with insolvency risk rates of 4 to 25 times the average rate. The latest research confirms that the challenging and uncertain economic conditions are increasing the level of insolvency risk.

The Clarity analysis reveals that East Anglia has seen the strongest rise in distress levels as the year has progressed. Among the most striking findings are those for the North East and Wales, having increased month-on-month in the 4-8% risk category. However, further analysis shows that these regions saw reducing numbers of distressed SMEs in the higher risk rate percentage categories. This suggests that firms are ‘dropping down’ from higher levels of distress to the 4-8% category, which accounts for the consistent rise.

Not surprisingly, the research reveals that 2023 has been a volatile period for all the regions, with none seeing consistent growth or decline. 

Further distress analysis by region can be found in Quantuma’s new report ‘Clarity in uncertain times’. Designed to support professional advisers and business owners, this data rich report examines SME viability and vulnerability across sectors and regions, equipping professional advisers and business owners with powerful insights.

The way forward - Clarity in uncertain times

We have recently launched our latest programme of insight and support powered by our unique data asset, Clarity. Developed by an expert analytics team, the Quantuma Clarity data tool provides analysis of SME’s performance against growth and distress factors to provide professional advisers and business owners with powerful insights, to allow them to unlock potential.  

Clarity cover image 2023

Our latest report

To request your copy of ‘Clarity in uncertain times’, our data rich report comparing SME viability and vulnerability across sectors and regions, please click here.

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