Begbies Traynor's Red Flag Alert, the UK's leading quarterly benchmark of company distress, shows a 24% year-on-year increase of companies facing 'critical' levels of financial distress in the fourth quarter of 2011, compared to the same period in 2010.According to the firm, many key sectors face signficant rises in critical financial distress, with professional services in particular looking as a 61% increase and travel & tourism a 56% increase. General retailing is set for a 26% rise, with small- to medium-sized retailers the most at risk. Property services faces a 30% rise. Automotive and construction will be less affected, at 14% and 13% repectively. In addition, the South East's resilience to the recession is punctured with a 33% year-on-year increase in critical distress and 19% rise in London. Ric Traynor, Executive Chairman of Begbies, said: "Trends evident in the Red Flag Alert demonstrate that we are likely to be approaching a crucial period for businesses large and small. Escalating levels of distress indicate we may be getting close to the bottom of the economic cycle, where so called 'zombie" businesses, which are inherently insolvent, but have benefited from extensive support measures such as HMRC's 'Time to Pay' scheme eventually fail."The figures certainly follow the typical cycle of recession; previous quarters showed growing numbers of 'significant' distress, but this is now crystallising into 'critical' levels - particularly within the automotive, construction, property, professional services and general retailing sectors."NR