The firm’s Red Flag Alert research for Q1 2017, which monitors the financial health of UK companies, indicates that industrial transportation and logistics businesses experienced the largest increase in 'significant' distress, up 46% year-on-year (Q1 2017: 7,539 companies).

There was also a 16% increase in the wholesale sector (7,706 companies) and a 15% increase in the food and beverage manufacturing sector (6,405 companies).

The firm points out these negative findings are yet to reflect the recent increase to the NLW that came into effect on 1 April 2017, which it says is likely to add even more pressure to the margins of these sectors, which have a relatively high reliance on lower paid and temporary workers.

Julie Palmer, partner at Begbies Traynor, said: ‘Levels of financial distress have increased significantly over the past year, and nowhere more so than in the transportation and logistics sector, which continues to be severely hit by ongoing fuel price inflation.

‘Given the scale of the increases in distress during Q1, it would appear that food suppliers, logistics firms and wholesalers are yet to fully pass on these rising costs to their customers. But it is only a matter of time before we start to see this coming through, especially given the added margin pressures associated with the new NLW.

‘Once those costs ultimately feed through to consumers, we'd expect further pressure on sectors exposed to discretionary spending such as retail, bars and restaurants, travel and leisure.’