With fears of a UK recession appearing to be lessening, the economic picture in Yorkshire and the Humber is also looking slightly more optimistic as the number of start-ups in the region increased for the second consecutive month in February.
Since the 2022 low of only 3,295 new businesses registered in December, insolvency and restructuring trade body R3’s research, which is based on an analysis of data provided by CreditSafe, shows that last month the figure grew to 4,604 start-ups in the region in February – a 39.7% increase over the two-month period.
In fact, February saw a positive picture for entrepreneurship across the whole of the UK with all 12 regions and nations recording a rise in start-ups over the last two months. The largest increases were seen in Northern Ireland (up by 86.9%); Wales (up by 70.5%); and the South West (up by 63.6%).
However, looking at other signs of economic confidence or distress, last month slightly more businesses in Yorkshire and the Humber experienced insolvency-related activity (which includes liquidator and administrator appointments and creditors’ meetings). The figure rose from 207 in January to 248 in February, although this was lower than the 259 businesses recorded in December.
All other regions and nations also saw a month-on-month rise in levels of insolvency-related activities, apart from Scotland which dropped by 10.9%. The lowest increases were in Wales (up 5.8%); Northern Ireland (up by 11.1%); and Yorkshire and the Humber (up by 19.8%). In contrast, the West Midlands (up 58.2%) and the North East (up by 47.5%) saw the largest increases.
The region saw a slight rise in the number of businesses which had been unable to meet their payments on time with late payment of invoices increasing from 47,021 in January to 48,244 last month.
February also saw an uplift in the number of invoices on the books of firms in Yorkshire and the Humber that had not been settled by their payment deadline, increasing from 527,448 in January to 540,399 last month.
“In recent weeks, we’ve seen some slightly more encouraging economic signs such as the construction sector re-bounding into growth last month and the UK car market continuing to grow. It’s good to see some optimism returning in Yorkshire and the Humber too with an increasing number of budding entrepreneurs taking the plunge and starting their own business last month,” comments Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds.
“However, the rising levels of insolvency-related activity continue to be a worry and we are certainly not out of the woods yet. Slow payment of bills has long been a problem for small businesses and there are signs that this issue is increasing, perhaps because customers have been delaying settling bills in the face of the proposed withdrawal of Government energy support at the end of March.
“With the war in Ukraine continuing, along with inflationary pressures, businesses would be well advised to keep a close eye on cash flow and seek professional advice at the first sign of problems.”