A sharp hike in the monthly number of start-up businesses in the West Midlands – to one of the highest regional rises in the UK – is a welcome uplift for the local economy, but business owners should remain cautious over coming months.
This is according to the Midlands branch of the UK’s restructuring, turnaround and insolvency trade body R3 and is based on a monthly analysis of regional start-up data from business intelligence provider Creditsafe.
The figures indicate that there were 6,730 businesses set up in the West Midlands in September, which is the highest number for the region since April 2024 and is a rise of over a quarter (26%) compared to September of last year. Only Wales and the North East have a greater increase over the same period.
R3’s analysis also shows a decrease in insolvency-related activity across the West Midlands in September, with fewer liquidator and administrator appointments as well as creditors’ meetings.
R3 Midlands chair Stephen Rome, a partner at the Birmingham office of law firm Penningtons Manches Cooper, said: “It’s good to see the entrepreneurial appetite building back up again in our region, but we should remain cautious as the business economy continues to be hugely challenging and unpredictable.
“Construction is struggling, with housebuilding slowing and smaller contractors reporting quieter pipelines. This is a sector which tends to feel changes in economic conditions quickly, and many firms lack the reserves to withstand long gaps between projects.
“Retail and hospitality are also facing difficulties, with high staff costs and subdued consumer confidence. A further update on transforming business rates is expected in the November Budget, but meaningful change is needed swiftly for our struggling regional sectors.
“The labour market is beginning to reflect the economic uncertainty. Unemployment continues to edge up while vacancies have fallen, and high profile industrial disputes contribute to a general sense of unease.
“All of this reinforces how important it is for entrepreneurs to monitor their finances carefully over the coming months. If cash flow becomes a major challenge, it is imperative to seek professional advice sooner rather than later.
“Most R3 members will give prospective clients a free initial consultation to learn more about their situation and outline the potential options open to them to improve it.”
