The number of financially distressed businesses in Yorkshire fell in the first quarter of 2025, according to new data from Begbies Traynor’s Red Flag Alert report.
Between January and March, around 40,000 businesses in the region experienced significant or early signs of distress — a 12% drop compared to the previous quarter, equivalent to nearly 6,000 fewer businesses. However, financial distress remains higher than it was a year ago, up 6% compared to Q1 2024.
This regional trend reflected wider national patterns. Across the UK, business distress fell by 12% compared to the final quarter of 2024 but rose by 4% year-on-year, affecting a total of 579,000 companies.
Several key sectors in Yorkshire showed improvements both quarterly and annually. Food and drink production, industrial transportation and logistics, manufacturing, and printing and packaging all recorded declines in distress levels. These improvements align with reports of modest economic growth and easing inflation in the UK during the early part of the year.
By contrast, certain sectors faced growing pressures. Hotels and accommodation saw a 21% year-on-year rise in financial distress, while real estate and property services were up 17%. Meanwhile, financial services, travel and tourism, and automotive industries recorded the sharpest quarter-on-quarter improvements, with distress levels dropping by 20%, 19%, and 16% respectively.
The figures were compiled before the introduction of US global trade tariffs in April, a move that could introduce new economic challenges for businesses in Yorkshire and beyond.
