The number of new businesses being set up in Yorkshire and the Humber rose for the second month in a row in July, despite a simultaneous increase in local insolvency-related activity, according to new analysis from R3, the UK’s insolvency and restructuring trade body.
R3’s latest figures, based on data from Creditsafe, show that business start-ups across Yorkshire and the Humber rose by 4% in July compared to the previous month. The region followed a UK-wide trend, with start-up numbers increasing in every part of the country apart from the East Midlands (-1%) and Northern Ireland (-2%).
However, the region also recorded a 7% rise in insolvency-related activity, which includes the appointment of liquidators and administrators and creditors’ meetings. This uptick mirrors trends seen across the North of England, with the North East seeing a 49% jump and the North West a 5% rise over the same period.
In contrast, insolvency-related activity fell by 62% in Northern Ireland and 23% in Wales. Elsewhere in England, it rose in East Anglia (24%), Greater London (16%), and the South East (13%).
Dave Broadbent, chair of R3 in Yorkshire and a partner at Begbies Traynor in York and Teesside, said: “It’s encouraging to see a steady increase in start-up activity in Yorkshire and the Humber, which suggests there’s confidence among entrepreneurs and an appetite to bring new products and services to market. This resilience and creativity are real strengths of the regional economy.
“However, the simultaneous rise in insolvency-related activity shows that many existing businesses are still under significant pressure. The combination of high interest rates, persistent inflation in some sectors, and ongoing supply chain issues is making it hard for firms to maintain healthy cashflow. For businesses operating on tight margins, especially in retail, hospitality and construction, the current economic climate remains incredibly tough.”
He added: “We’re also seeing the impact of pandemic-era support tapering off, with some companies now facing repayments or grappling with legacy debts they can no longer service. While some businesses are adapting and finding new routes to growth, others are reaching a tipping point.
“That’s why early advice is so important. Whether it’s cashflow forecasting, renegotiating payment terms, or more formal restructuring support, seeking help early gives businesses the best chance of recovery and survival.”
