North West business numbers increase

The number of active businesses in the North West has risen again during the first half of 2019, new figures from the insolvency and restructuring trade body R3 reveal.

They show that business numbers in the region rose by one per cent over the six months to reach more than 373,000 – although the rate of growth was much slower than during the ‘start-up boom’ of recent years.

Paul Barber, North West chair of R3 and a partner at Begbies Traynor in Preston, said business numbers were now not far off the peak of more than 374,000 recorded last November.

He added: “It is clear that the entrepreneurial spirit is alive and well in the North West. Despite the climate of uncertainty, people are still willing to set up new ventures and the number of start-ups offsets the number of businesses which have closed down.

“While business numbers are not growing as rapidly as before, we are now in a more difficult and risky business environment, with insolvencies on the rise.

“In any case it is likely that the rapid growth rates we saw three years ago were unsustainable. The figures show the start-up culture continues, but at a slower rate.”

It is clear that the entrepreneurial spirit is alive and well in the North West.

R3’s figures show that the proportion of companies at greater than usual risk of insolvency has remained high but almost unchanged during the first half, with just over four out of ten North West businesses (43.4 per cent) considered at higher risk of insolvency over the next 12 months.

Professional services was the sector with the highest proportion at elevated risk (49.5 per cent) of the industries tracked by R3, followed by technology and IT (46.2 per cent), construction (43.7 per cent) and transport and haulage (42.3 per cent).

Paul Barber added: “Many businesses are at heightened risk of insolvency in the current climate, and early-stage businesses are particularly vulnerable.

“With no end in sight to the uncertainty, managers need to keep a close eye on profitability and seek expert help at an early stage if problems arise. The earlier they seek help, often the more options there are.”