The rate of both new business starts-ups and insolvency-related activity dropped for the second consecutive month in Yorkshire and the Humber in May, while other regions saw sharp rises in insolvency-related activity, according to the latest research from R3, the UK’s insolvency and restructuring trade body.
Based on analysis of data provided by Creditsafe, the report shows a 10% decline in insolvency-related activity in the region last month, while new Yorkshire and Humber business start-ups also fell by 5%.
Business start-up rates dropped across every region of the UK, with Northern Ireland seeing the largest decline in new businesses, at 17% down, and the South East experiencing a fall of just 3%.
Insolvency-related activity, which includes liquidator and administrator appointments and creditors’ meetings, rose sharply in Scotland, where it was up by 30%, and the West Midlands (up 26%). The largest drop in insolvency-related activity was in the North West, which saw a 20% decrease.
Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, said: “Businesses across Yorkshire and the Humber are under real and increasing pressure at the moment and it is no wonder that this is also continuing to suppress entrepreneurial activity and new business growth.
“Rising costs across the board, from energy to raw materials, combined with high interest rates and tighter consumer spending, are in many cases putting a significant strain on cash flow, especially for small and medium-sized firms.
“For smaller businesses in particular it can often take only a few late payments or a quiet couple of months to cause real concern. Many business owners are working incredibly hard just to stay afloat, and it’s understandable that it can feel overwhelming.
“But it’s always important to stress that business owners don’t have to face these challenges alone. If your business is starting to struggle financially, speak to a qualified insolvency or restructuring professional as early as possible. The sooner you get help, the more options you’ll have to turn things around.
“These are people who are vastly experienced in working with businesses in difficulty and, in many cases, they can help you find a way to stabilise things and start moving forward again. It’s not about giving up but about giving your business the best possible chance to recover – and reaching out early can make all the difference.”
