Glimmers of recovery for region’s economy, but steep challenges remain for 2024 - report
A sharp drop in the quantity of debts owed by firms in liquidation in the West Midlands, as well as a decrease in the number of local companies with overdue invoices on their books, is a welcome cashflow boost for the local economy as businesses head into 2024.
According to the Midlands branch of R3, the UK’s insolvency and restructuring trade body, levels of debts owed by businesses in liquidation in the region fell by 22.99 per cent in November compared to October, while the number of local companies with invoices overdue for payment has continued to fall since May of this year.
The latest monthly statistic for businesses with late invoices remains high, however, at 44,788.
R3 Midlands’ figures, which are based on an analysis of data from business intelligence provider Creditsafe, also highlight a positive picture for start-ups in the region.
While the number of new businesses rose by only 2.87 per cent in November compared to the previous month, the latest figure of 6,533 is 17.08 per cent higher than 12 months previously in November 2022.
R3 Midlands chair Stephen Rome (pictured), a partner at the Birmingham office of law firm Penningtons Manches Cooper, said: “West Midlands businesses have been battling economic issues for three-and-a-half years now, and corporate insolvency numbers have been rising as more and more directors run out of options.
“It is encouraging, therefore, to see some improvements in cashflow conditions, as well as evidence of entrepreneurial appetite. However, as we head into 2024, inflation remains high, core prices continue to rise and the challenges facing local businesses are steep.
“It’s impossible to predict whether the current Christmas trading period will be a badly-needed boost for local firms or the final blow. It’s critical, therefore, that directors are alert to any signs of financial distress and act on them promptly.
“There is a significant amount which can be done to rescue and support West Midlands businesses, beyond traditional insolvency solutions, if help is taken early enough.”
