Latest research from the Midlands branch of national insolvency and restructuring trade body R3 paints a mixed start to 2023 for East Midlands businesses, with a significant increase in start-ups but a doubling of insolvency-related activity.
R3’s figures, which are based on an analysis of data from business intelligence provider Creditsafe, highlight a 13.9% rise in the number of companies set up in the East Midlands since the beginning of the year, rising from 2,460 in January to 2,803 in March.
R3’s analysis also shows a sizeable decrease in the number of bad debts on the books of East Midlands businesses, falling by 21.3% in March to 111 from 141 in January.
R3 stresses, however, that seeing these statistics as signs of longer-term business recovery should be viewed with caution, not least because there has been a sizeable increase in insolvency-related activities in the region since the beginning of the year.
The number, which includes liquidator and administrator appointments as well as creditors’ meetings, more than doubled (108.3%) between January and March of this year, indicating the extent of the economic challenges still facing East Midlands companies.
R3 Midlands committee member Stephen Rome, a director at law firm Thursfields in the region, said: “This R3 report reveals how challenging it is for local businesses to survive and grow in this current climate. While the increasing number of start-ups in the region is positive, as are the indications of improving cashflow, we are still facing huge economic hurdles.
“Inflation, contracting economies, higher energy and wage costs and low consumer confidence are all threatening the sustainability of East Midlands businesses, who are having to fight hard to survive.
“Our advice to any directors who are worried about the viability of their company, start-up or otherwise, is to seek professional help and to do it as soon as possible. Many R3 members offer a free consultation to those who want to explore their options.”
