LOCAL businesses are more secure than last year, according to one of the UK’s most highly respected business monitoring services – but zombie companies are stifling longer term growth.
Red Flag Alert, issued by Begbies Traynor, business recovery specialists, reveals across the Midlands, 32 per cent fewer businesses faced critical issues between July and September 2012 than at the same time in 2011. National figures show a fall of 22 per cent.
In Birmingham there has been a 24 per cent fall in businesses with critical issues between quarter two and quarter three of this calendar year.
John Kelly, regional managing partner at Begbies Traynor’s Birmingham office, said: “The statistics reflect what I believe is a more stable economic environment for businesses in Birmingham and across the Midlands. While we are not seeing growth, companies are controlling costs, improving efficiencies and grappling with the economic conditions. As a result there are fewer businesses in financial difficulty.
“Of particular note in Birmingham are falls in the number of businesses at risk in the construction sector and in retail - two sectors where both on a local and national level we have seen significant issues in recent years.
““However, there are still a significant number of companies being supported beyond their normal lifetime by banks providing capital repayment holidays.”