More firms are 'feeling the pinch'
Insolvency survey reveals property companies under pressure
Firms are facing financial difficulties in growing numbers with property businesses under particular pressure, according to research from insolvency experts.
Today's Red Flag Alert survey from Begbies Traynor said the number of firms feeling the pinch grew by over a quarter towards the end of last year.
The findings tally with a downbeat purchasing managers' index from Ulster Bank last week, which marked the end of 17 months of growing business activity.
According to Begbies Traynor, firms in the manufacturing and property-related sector were in dire straits. In fact, numbers of real estate and property services firms facing financial trouble in the last three months were double the quarter before.
Lawrence O'Hara of Begbies Traynor said: "A quarter of the total number of Northern Ireland firms with critical problems were in the real estate sector and a further 23% were in the construction industry showing that the Northern Ireland property sector experienced significant challenges in the fourth quarter."
In fact, nearly half of all troubled firms were in the construction and property sector, according to the firm - casting doubt on separate surveys which suggest a recovery in the residential property market.
Retail was also facing problems, according to Mr O'Hara.
"General retailing has seen a challenging quarter four with 8% of the total businesses facing significant financial distress," he said. "Northern Ireland appears to be reflecting the trend set in the rest of the UK, ie, smaller retailers feeling the effect of the increased price competition of the larger retail chains."
He said while consumers were enjoying the benefits of cheaper oil, austerity in the public sector spelled an "uncertain future" for small shops in 2015.
He added: "Food producers in Northern Ireland who rely on Great Britain customers may be facing tougher times as price wars erupt."
The findings of Begbie Traynors' survey follow last week's Ulster Bank's purchasing managers' index for January.
It said business recovery in Northern Ireland slowed in December.
Output had dropped in the main sectors of manufacturing, construction, retail and services.
Employment and activity in both retail and manufacturing fell in December, company bosses told the monthly survey - though employment rose in services and construction.