Business distress falls in Northern Ireland - outperforming UK averages

The most recent Red Flag Alert data, released quarterly for over 22 years, shows that businesses in Northern Ireland have seen significantly fewer ‘critical’ and ‘significant’ instances of financial distress in the third quarter of 2026, when compared to the same period in 2025, a welcome reduction, and significantly ahead of the wider UK trends. 

The data, that is analysed by leading independent financial and real estate advisory group BTG, shows that levels of the most serious ‘critical’ instances of distress in businesses across the region fell by 23.9% year-on-year (to 710), a reduction more than 3% better than the UK average of 20.7%. 

In total, 16 of the 22 sectors measured saw falls in levels of critical distress year on year. The largest falls were in financial services (-66.7%), industrial transportation & logistics (-55.0%), food & drug retailers (-54.1%) and utilities (-53.9%).

Only 5 of 22 sectors saw a rise in levels of critical financial distress compared with the previous year, these were printing & packaging (+50.0%), automotive (+42.9%), food & beverages (+20.0%), general retailers (+4.6%) and wholesale (+3.9%).

Less serious instances of ‘significant’ early financial distress, that are also measured in the data every three months, showed a welcome fall of 8.9% from Q3 2025, countering the UK trend that saw a rise of 1.6% across all UK regions. 

Businesses in 18 of the 22 sectors monitored saw a drop in levels of significant distress year on year. The most notable falls in distress were within food & beverages (-46.0%), manufacturing (-41.6%), wholesale (-27.9%) and industrial transportation & logistics (-27.6%) businesses in Northern Ireland.

Only 4 out of 22 sectors saw a rise in levels of significant financial distress in Q3 2026 compared with the previous year. These were printing & packaging (+34.6%), media (+12.5%), real estate & property services (+4.7%) and support services (+2.9%).

Thomas McKay, managing partner for BTG in Scotland and Northern Ireland, said:

“A fall in the levels of distress is always welcome, and to see businesses in the region outperform the UK average is particularly good news this quarter.

“When compared with the same period 12 months earlier, to have falls in both the serious and critical distress instances shows that the businesses in Norther Ireland are adjusting to the headwinds in the market better than their counterparts elsewhere in the UK.

“That doesn’t mean though that there are not areas of concern, and in particular printing and packaging was the sector hardest hit, with the highest rises in both critical and significant distress.

“Other sectors that are seeing tightening conditions and rising levels of the most serious critical instances included automotive, food and beverages, retailers and wholesale, all of which are significant employers here.”