Report: Financial distress in Northern Ireland soars, with nearly a third more businesses struggling in Q4 2024

An increasing number of businesses in Northern Ireland were impacted by financial distress in Q4 2024, echoing trends of rising distress across the UK.

The province experienced a sharp rise in early signs of financial distress, which rose by almost a third in Q4 2024 compared with the previous quarter, according to the latest Red Flag Alert data from leading independent business rescue and recovery specialist Begbies Traynor.

Providing a quarterly snapshot of British corporate health, the Begbies Traynor research from Q4 2024 shows that levels of serious ‘critical’ financial distress rose by 36.4% in Northern Ireland compared with the previous three month period, a slower rate of increase than the UK as a whole which saw levels climb by just over 50%.

The 766 instances of critical distress reported in Northern Ireland represented a 3.9% rise in the province compared with the same period the previous year, bucking the trend of the UK-wide average which saw a fall of more than one 1% year on year.

Almost 20% more businesses in Northern Ireland were affected by early signals of ‘significant’ financial distress compared with Q4 2023. This type of distress (which refers to deterioration in key financial ratios and indicators including those measuring working capital, contingent liabilities, retained profits and net worth) impacted 10,873 businesses in the province.

The province’s sectors showing the most marked rises in ‘significant’ financial distress in Q4 2024 included professional services, health & education, construction, and leisure and cultural activity. However, there were better performing areas of the economy, with eight sectors in the province showing falls in early distress since the previous quarter led by travel & tourism, utilities and printing and packaging.

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Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland, said: "Another quarter of unwelcome rises in distress do not bode well as we head towards a difficult Q1 of 2025.

"There was little to help business confidence in the Autumn budget, and boards are grappling with rising costs in the supply chain, as well as the additional payroll burden that will hit the bottom lines of employers after April.

"The fact that the province saw smaller rises in distress than most others across the UK is one of the few positives we can draw from the data from the last quarter of 2024, but all signs point to a period of tough trading for a large proportion of businesses as they fight continued economic headwinds in 2025."