(Image: BTG)
Nearly 3,700 companies in Yorkshire are now in 'critical' financial distress, according to new research.
The latest Red Flag Alert data from financial and real estate advisory group BTG reveals a 7.9 per cent rise in critical distress compared to the same period last year, with 3,696 firms in Yorkshire severely struggling as of June 30, 2026.
This increase is slightly below the UK-wide rise of nine per cent.
Julian Pitts, BTG’s Leeds-based national managing partner for restructuring, said: "The worrying underlying trend shows a nearly eight per cent increase in critical financial distress levels in Yorkshire year on year.
"The very slight drop in the early-stage or ‘significant’ distress in our region, compared to Q2 2025, paints a mixed picture and many businesses are still under considerable pressure from rising costs, energy and fuel prices, and wider economic uncertainty.
"While that cautious approach can help preserve cash and provide some short-term resilience, it can also mean that businesses delay making decisions that could support future growth."
Less severe ‘significant’ or early-stage financial distress in Yorkshire fell slightly, down 0.4 per cent from last year, affecting 45,645 businesses.
Nationally, significant distress rose by 1.1 per cent over the same period.
A sector breakdown in Yorkshire showed mixed results, with 14 out of 22 sectors reporting a decline in significant distress.
The biggest improvements were seen in utilities (down 23.3 per cent), hotels and accommodation (down 13.1 per cent), wholesale (down 13.1 per cent), and printing and packaging (down 13 per cent).
However, real estate and property services saw a 9.3 per cent increase in distress, followed by leisure and cultural activities (up 4.8 per cent), automotive (up 4.6 per cent), and manufacturing (up 2.7 per cent).
BTG Red Flag Alert has tracked business distress levels across the UK for more than 20 years.