The number of businesses in Preston facing financial difficulty rose in the second quarter of 2014 despite a general increase in business confidence, according to the latest Red Flag Alert Report from corporate rescue and recovery specialists Begbies Traynor.
The research found the number of businesses in significant distress rose by 10 per cent between April 2014 and June 2014, with 1,146 companies across the city now reported to be experiencing problems, compared with 1,040 in quarter one.
One sector that has seen a large increase in firms experiencing significant financial difficulty is the construction industry, where there has been a 35 per cent rise compared with the first quarter of 2014 and a 57 per cent year on year increase.
Retail has also struggled during the past three months, with businesses in significant distress increasing by 35 per cent and a year on year rise of 89 per cent.
David Acland, Partner at Begbies Traynor in Preston, said: “The number of businesses facing difficulty has risen over the past three months.
“Construction is a particular example of a struggling sector, where, despite the reported housing boom, pressure is significantly growing within the industry.
“One reason for this is over trading, as firms seize the numerous opportunities resulting from the economic upturn, but are unable to deliver them due to lack of available resources.”
In contrast the city’s bars and restaurants have reported a positive second quarter.