Southampton: Businesses facing up to the ‘new normal’ says Begbies Traynor

Businesses in Southampton - much like the rest of the country - are facing up to the ‘new normal’ of small or no growth, and many companies are still facing significant financial issues that are holding back that growth. Red Flag Alert, the quarterly report which measures business distress across the UK, issued by business recovery experts Begbies Traynor, shows a 1% decrease in businesses facing significant issues in Southampton in the quarter from January to March 2013. 

Falls of 24% in the construction industry and 8% in retail and property services were offset by a 13% increase in telecoms and IT businesses facing financial distress and 7% in automotive.

Julie Palmer, partner at Begbies Traynor’s Southampton office, said: “We are into unchartered territory. We have not seen a period of minimal growth and change in the economy last this long before, and there is no real sign that this will end soon.

“Therefore it’s vital that businesses across Southampton and the UK adapt to this ‘new normal’. The key tenants of effective cost controls and cashflow management are increasingly important.

“Growth that we do see, is likely to come in small percentage points, so maintaining a well-run and profitable business, that is able to grow, even if it is not at the double digit rates we have seen previously, will help to make individual businesses more secure and improve the regions’ overall prosperity.”

Sectors up, sectors down

A feature of this quarter’s Red Flag results in Southampton is small changes across a number of sectors, without a substantial change anywhere or to the overall figures.

Industrial transportation and logistics dropped by 33%, media saw a 3% fall and general retailers were down by 8%. Sectors with increased levels of significant issues are financial services (20%), leisure and culture (16%) and sports and recreation (10%).

In our region

Across the south the picture was similar with a 3% increase in significant issues in Portsmouth, a 2% drop in Bournemouth and a 6% fall in Salisbury.

Palmer continued: “Across the UK, towns and cities showed similar trends to Southampton with small increases or decreases across the board, and signs that the ‘new normal’ is here for all.”