A NEW report from a national insolvency business suggests hundreds of Worcester businesses are in serious financial difficulty.

Figures from Begbies Traynor’s latest Red Flag Alert report, which monitors the financial health of UK companies, revealed 900 businesses in the city to be in significant financial distress during the final quarter of 2018, up 3 per cent compared with the previous quarter.

Worcester companies in the support services and IT sectors are faring the worst, with the number of companies considered to be in distress having increased by 8 per cent during the past quarter.

On the other hand, fewer firms in the property and leisure sectors are facing financial difficulties than in the previous quarter according to the report.

Brett Barton, partner at Begbies Traynor in Worcester, said: “After a period of relative stability, these figures for Q4 show that Worcester businesses have experienced a winter of discontent with customers for traditional shop‐front retailers going online and the uncertainty of Brexit is also having an effect on investment in a number of sectors.

“It seems, for the last quarter at least, that businesses are holding out for a decision on the terms of Brexit in order to see where they stand, which is having a knock‐on effect on consumer confidence. With 2019 set to be a year of change, Worcester businesses will need to adapt and rapidly evolve to survive”

Sharon Smith, chief executive at Herefordshire & Worcestershire Chamber of Commerce, said: “Although we are hearing from Members that businesses are struggling with price pressures, the number of companies reporting reductions in their cash flow has remained constant over the last six months.

"For businesses to thrive and grow in the two counties, they require an environment where the fundamentals are conducive to success. Firms now conduct business in a rapidly changing context; technological advances have seen significant changes to the way we work and how we consume products and services.

“The Chamber will continue to work with local businesses to outline the concerns that are affecting companies, and lobby for these issues at both local and national government to ensure that the two counties remain a great place to do business.”