Rise in North West businesses in financial distress slows

The number of businesses experiencing ‘significant’ financial distress in the North West has risen to more than 74,000, according to the ‘Red Flag Alert‘ monitor of UK companies’ financial health by Begbies Trainor.

While the total number of firms (74,079) experiencing distress rose 12.6% year-on-year, that rise had slowed and was up just 6.5% on the previous quarter in the region as a whole, a trend that was seen throughout the region.

In Stockport, Begbies Traynor found 2,644 businesses were in ‘significant’ financial distress in Q3 of 2025, representing a 15.6% rise compared to the same period last year, ahead of the regional and national rates. However, compared to the previous quarter, the rise of firms facing financial distress was 5.2%.

Hardest hit industries in the North West were Construction (+14%, Q3 2025 – 10,645) and Real Estate and Property (+30.8%, Q3 2025 – 8,795) and Support Services (+15.5%, Q3 2025 – 11,622). However, financial distress in the Industrial Transportation and Logistics sector decreased year on year (-1.5 Q3 2025 – 1,633) and, despite widely reported difficulty, Bars and Restaurants (-4.5%, Q3 2025 – 1,945) and Food and Drug Retailers (-20.9%, Q3 2025 – 1,876) both saw annual decreases in ‘significant’ distress.

Nationally, the latest Red Flag Alert research for Q3 2025 recorded 726,594 businesses in significant distress – a 14.8% increase year-on-year.

Commenting on the figures, Dean Watson, Partner at Begbies Traynor, said:

“As we approach the budget in November, businesses are looking for certainty in what has been a turbulent and unpredictable year, and this will no doubt be the case for those in the North West.

“When facing uncertainty, businesses feeling the pressure often have options if leaders are able to assess their past, present and future income streams and confront the first signs of distress. Though it has been promising to see the rate slowing this quarter, we may continue to see businesses, particularly SMEs, seeking restructure, refinance or an exit. This means surviving and thriving companies have an opportunity to pick up business left and strengthen or diversify their own offering, while giving ideas, assets and talent a second chance through acquisition and rescue.

“The next month is crucial for businesses in the North West. To carry out work, deliver jobs, ideas, productivity and growth there needs to be a healthy balance of small, medium and large companies. Business leaders in the region working across consumer-facing industries to those building houses and machines need confidence from this budget to be persuaded to invest in jobs and expansion.”