A steep drop in the number of new businesses set up in the East Midlands has continued into a second month, with signs that heightening economic risk is stifling local entrepreneurs.
This is according to the Midlands branch of national insolvency and restructuring trade body R3 and is based on an analysis of regional start-up data from business intelligence provider Creditsafe.
The figures show there were 1,775 businesses set up in the East Midlands in December, which is down by over a quarter (29%) compared to the 2,500 new businesses registered in October. The December figure is also significantly lower (11.51%) than at the end of 2023, when there were 2,006 start-ups in the final month of the year.
R3 also reports that the economic picture for established businesses in the region continues to be volatile and mixed. The number of East Midlands companies with late payments on their books remained high in December at 24,124, but the volume of debt owed by firms in liquidation across the region fell compared to the previous month.
R3 Midlands Chair Stephen Rome, a partner at law firm Penningtons Manches Cooper in the region, said: “It’s understandable why local entrepreneurs have taken such a cautious approach over the last couple of months.
“We are facing significant geopolitical issues which could hamper company growth, while higher levels of inflation, international trade restrictions and increasing economic uncertainty are putting sizeable pressures on local companies and restricting new business opportunities.
“There are projections, however, that the UK economy will rebound in 2025. From my own professional experiences and those of my fellow R3 members, I can see that there is both strength and resilience in our local economy and, armed with the right professional support, companies should be well-placed to combat challenges in the year ahead.
“Importantly, should significant cash flow difficulties arise, it’s crucial to take professional advice as soon as possible. There is a significant amount which can be done to rescue and support local businesses if help is taken early enough.”
