Seeds of recovery sown for region’s economy as start-up businesses increase – report
A sharp rise in the number of start-ups in the West Midlands and a fall in insolvency-related activity are sowing the seeds for economic growth in the region as businesses head into the first quarter of 2024.
According to the Midlands branch of R3, the UK’s insolvency and restructuring trade body, there were 5,256 businesses set up in the West Midlands in December, which is a third (33.33 per cent) higher than twelve months previously.
R3’s figures, which are based on an analysis of data from business intelligence provider Creditsafe, also show that levels of debts owed by businesses in liquidation in the region fell by 15.97 per cent over the same period, and by over a quarter (25.37 per cent) between November and December last year.
At the same time, insolvency-related activity in the West Midlands – which includes liquidator and administrator appointments as well as creditors’ meetings – fell by 10.49 per cent in December compared to the previous month.
R3 Midlands chair Stephen Rome (pictured), a partner at the Birmingham office of law firm Penningtons Manches Cooper, said: “These are encouraging statistics and are welcome reading at a time when local companies are facing significant and longstanding economic challenges.
“We should be in no doubt, however, that a sizeable percentage of our region’s businesses continue to struggle, and we are very likely to see corporate insolvencies rise in the coming months.
“The focus now has to be on maintaining these positive figures over the longer term, stimulating further growth and facilitating recovery for those businesses which are struggling.
“Key to this is the ability and willingness of business owners to monitor their company’s finances carefully and to plan ahead. As soon as cash flow becomes a major challenge, professional advice should be sought.
“Crucially, there is a significant amount which can be done to rescue and support West Midlands businesses if help is taken early enough.”
