SCOTLAND has more businesses in critical distress than the UK as a whole, new research has found, with the construction, food and beverage, and bar and restaurant sectors seeing the most marked increases in vulnerability.

The number of Scottish firms in advanced distress increased by 18 per cent in the three months from April compared with the second quarter of 2018, according to the latest quarterly Red Flag Alert from Begbies Traynor. That compares with a 5% rise in the number of firms in critical distress for the UK as a whole, the report found.

Begbies found escalating instances of distress among construction firms in Scotland, which grew by 42% compared with 5% across the UK. This distress, which refers to firms that have had winding up petitions or decrees totalling more than £5,000 against them, was also seen in the food and drink and hospitality sectors. Ken Pattullo of Begbies Traynor, said: “Once again, we are seeing higher levels of businesses in Scotland facing advanced financial distress as they continue to try to operate amid ongoing political and economic uncertainty. The combination of a slowdown in consumer spending... with rising levels of company debt is worrying.”