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In the third quarter of 2025, over 12,100 businesses in the province suffered from early or ‘significant’ financial distress. This was a rise of 21.6% compared with the same period the previous year, and a 16% increase since the previous quarter. Providing a quarterly snapshot of Britain’s corporate health, the Red Flag Alert data shows that across the UK there was a 14.8% rise in significant distress year-on-year and a 9% increase compared with Q2 2025, with 726,600 businesses now in significant distress. In Northern Ireland, levels of advanced or ‘critical’ distress in the latest quarter rose by 64% year-on-year, and by 10.9% since Q2 2025, affecting over 930 businesses in the province. These increases were below the UK total which experienced a 78% uplift in this type of distress since Q3 2024, and a rise of 12.6% quarter-on-quarter with more than 55,500 businesses now categorised as being in this advanced distress. Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland, said: “Businesses in Northern Ireland and across the UK are continuing to struggle in the face of ongoing issues, including the worst inflation of any G7 country. Although there was a very slight growth in GDP in August, retail sales grew and inflation was lower than expected, the economy is moving forwards slowly. As well as the problem of stagnating real wages, there is the added worry of rising unemployment which could set pressure on consumer spending.” Thomas McKay, managing partner for Begbies Traynor in Northern Ireland, added: “After such a challenging few years for businesses, we are continuing to see an increasing number of firms struggling in the face of ongoing inflation as well as global trade uncertainty. Unfortunately, levels of early distress in Northern Ireland are growing more quickly than those across the UK as a whole and we urge business owners to prepare for the tough economic climate to continue – it is vital that they keep a very close eye on finances and seek professional support at the first sign of problems when advisers will have more tools available to help them to prevent problems from escalating.” In terms of significant distress, in Northern Ireland almost all of the 22 industry categories monitored by Red Flag Alert saw increases in Q3 2025 compared with the same period the previous year. Looking at changes since the previous quarter, the worst affected were: travel and tourism with a 84.6% hike, affecting 72 businesses; followed by manufacturing, up by 64.8%, affecting 519 businesses; transport and logistics, up by 42%, affecting 341 businesses; and utilities (affecting 142 businesses), sports and health clubs (affecting 290 businesses) and telecoms (affecting 651 businesses), all of which rose by over 30%.
