2
CAN MIDDLE-MARKET FIRMS WITHSTAND A CAPITAL CRUNCH?: Insights from the AlixPartners 18th Annual Turnaround and Transformation Survey 2
In particular, the rising cost and reduced availability of
capital are sounding alarms across the world. These
will be the biggest drivers of corporate distress in 2023,
according to this year's Turnaround and Transformation
Survey. More than one third (36%) of respondents
worldwide cited capital as the main challenge, ahead of
inflation at 25%. Capital isn't just scarce, but harder to
secure: almost all (85%) reported a tightening in credit
terms, up from 52% in 2022.
The headline findings mask regional a divergence. While
capital constraints are seen as the largest single cause
of distress in the Americas, respondents in the U.K.
cited inflation as the number one issue. This may simply
reflect the fact that U.S. inflation has cooled more quickly,
with consumer prices increasing at around half the rate
compared to the U.K. at the time of our survey. It would
not be a surprise to see financing concerns rise further up
the agenda in EMEA markets as the year progresses, in
line with trends elsewhere.
AS ONE MACROECONOMIC
FIRE ABATES,
OTHERS RAGE.
WHAT IS THE TOP FACTOR DRIVING DISTRESS?
0
10
20
30
40
50 Availability or
cost of capital
Inflation Change in
consumer
preferences Technological
disruption
Regulatory
changes /
legislation
Supply chain
operations
Labor
shortage
Percentage