'Unprecedented' North West business growth cools

R3’s figures also show that risk scores for businesses have risen significantly during the year, with 43 per cent of North West businesses now considered at higher than usual risk of failure, compared to 32 per cent in December last year.

Paul, who is the North West Chair of R3 and a partner in the Preston office of Begbies Traynor, said: “In recent years we have seen the emergence of the start-up culture, with more and more people setting up their own business – more than one, in some cases. It is likely though that such rapid growth in business numbers was unsustainable and therefore not altogether surprising that it has slowed down.

“However it is harder to explain the sharp fall in December. Certainly it cannot all be due to insolvencies - official figures show that during the whole of 2017, around 2,200 businesses became insolvent in the North West and while the 2018 figure may be higher, it cannot account for the drop in numbers.

“Clearly, many businesses are closing down voluntarily. No doubt many will be early-stage firms – people have tried out an idea and decide it hasn’t worked out. I suspect that the climate of uncertainty is also taking its toll. Companies are putting projects on hold and their suppliers are struggling."

The figures are from R3’s latest insolvency risk tracker. The tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.