Mixed start to 2023 for WM businesses
It was a mixed start to 2023 for West Midlands businesses, with a significant increase in start-ups but a doubling of insolvency-related activity.
Latest research from the Midlands branch of the UK’s insolvency and restructuring trade body R3, which are based on an analysis of data from business intelligence provider Creditsafe, highlight a 14.55% rise in the number of companies set up in the West Midlands since the beginning of the year, rising from 5677 in January to 6503 in March.
The analysis also shows a sizeable decrease in the number of bad debts on the books of West Midlands businesses, falling by 16.7% in March to 310 from 372 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 (105.5%) between January and March of this year, indicating the extent of the economic challenges still facing West 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 West 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.”
