The number of new businesses set up in the West Midlands has fallen for the first time this year, as record levels of inflation and other key economic stressors start to impact on post-pandemic recovery.
Latest research from the Midlands branch of national insolvency and restructuring trade body R3 shows that there were 5,404 start-ups in the West Midlands in April, a 21% decrease on the March figure of 6,845, and 3% below the 5,585 statistic for February.
R3’s research, which is based on an analysis of data from business intelligence provider Creditsafe, highlights the effect that the current climate of spiralling inflation, a contracting economy and decreasing consumer confidence is having on the region’s entrepreneurs.
R3 Midlands chair Eddie Williams, partner at PwC in Birmingham, said: “The statistics have revealed that, during the first quarter of 2022, there was an increase in start-ups in the West Midlands, many of which were led by individuals who were furloughed or made redundant during the pandemic and who used the lockdowns as a springboard to venture out on their own.
“However, with news that prices are now rising at their fastest rate for 40 years and that UK inflation jumped by 7% between March and April, it appears that the region’s entrepreneurial spirit has been significantly dampened.
“With the global, national and local economies facing enormous challenges, the majority of start-ups are having to fight hard to survive and grow, particularly as they set up and bed in new operating controls and procedures as well as establish and build relationships with suppliers, customers, employees and other stakeholders.
“For those new businesses whose directors may be worried about its situation, the sooner professional advice is sought, the more opportunities may be available to support a company’s survival and future success. Many R3 members offer a free consultation to those who are looking for such help and want to explore their options.”
