SOUTHAMPTON is among cities and major towns in England and Wales experiencing the fastest growing green shoots of recovery, according to an insolvency expert.

Figures provided by rescue and recovery specialist Begbies Traynor’s Red Flag Alert show the number of Southampton businesses struggling financially tumbled by 38 per cent year on year.

Businesses experiencing “significant” levels of financial distress fell by 20 per cent year on year.

Figures show a six per cent fall in the last quarter.

Nottingham and Cardiff had the biggest fall, with eight per cent fewer businesses facing significant issues, followed by Bournemouth, which saw an eight per cent drop. Salisbury saw a five per cent fall.

Gavin Savage, director at Begbies Traynor in Southampton, said: “Across the UK, the services sector continues to prosper and this is reflected in Southampton and the south-east.

“The real estate and construction markets are showing signs of improvement, having benefited from an improved mortgage environment as well as popular Government initiatives such as Help to Buy.

“With critical distress levels falling across the south-east, this quarter’s improvement appears to be the first real sign that the UK economy has turned a corner towards a sustained recovery.

“However, we have real fears that many small and mediumsized enterprises (SMEs) will have serious financial difficulties at the time they least expect – during a recovery.

“Our experience has shown time and time again that many SMEs run out of cash during the recovery phase, as there is a real temptation to overtrade.

“Many of these companies at risk have been labelled as “zombie” businesses.

With the majority having survived the worst of the recession they are now chronically under-funded; benefiting from low interest rates and improving confidence but in desperate need of funding and, crucially, guidance to help them take advantage of the economic recovery in an unfamiliar post-crisis market.

“To begin the process of guiding these businesses back to health, Begbies Traynor is developing a five-point corporate health manifesto, which we hope will encourage further debate on this topic and drive struggling businesses to seek out the support they need.”