More than a quarter of fresh produce companies are already showing recessionary behaviour, a new study has shown.

The early warning signs for how a recession would hit the UK fresh produce industry have been put together by analyst Plimsoll Publishing, to be published on May 1.

The analysis has drawn on the latest figures for each of the UK’s top 1,200 companies in the fresh produce market.

The report will show that 60 per cent of companies have seen their margins fall, while more than a quarter of these are currently running at a loss.

A quarter have seen an increase in their need for short-term finance in a sign that costs are running ahead of cash flow.

It is feared that as many as one in eight produce companies could disappear completely if this trend continues.

But the analysis has shown some evidence that small companies, with their concentration on local and domestic markets, are less exposed to the slowdown in the market.

David Pattison, senior analyst at Plimsoll, said: “We are reading every day how the credit market and the world of finance has been hit, but nonetheless I was still surprised to see just how much the fresh produce market is feeling the pressure. I hope this report is recognised as an early warning sign, and managers read this and use the findings to steer a course though these tricky times.”

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