A steep rise in the number of West Midlands start-ups and a drop in insolvency-related activity are showing sparks of economic recovery in the region as local businesses head into the first quarter of 2025.
According to the Midlands branch of R3, the UK’s insolvency and restructuring trade body, there were 5,669 businesses set up in the West Midlands in January, which is almost a third (29.55%) higher than the previous month (4,376) and is one of the highest monthly statistics of the past six months.
The figures, which are based on R3’s analysis of data from business intelligence provider Creditsafe, also highlight a January fall in insolvency-related activity in the West Midlands, which includes 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 some positive growth statistics emerging in our region, particularly as we are currently facing so much economic uncertainty.
“It is important to see the full picture, however, and R3’s analysis shows that a sizeable percentage of our region’s businesses continue to struggle – 47,884 West Midlands companies had late payments on their books in January, which is not only high, but is also a rise from the previous month.
“Going forward, there are reports that economic growth will accelerate this year, mainly due to a drop in interest rates and an increase in government spending, but significant hurdles remain for businesses to navigate.
“Key to capitalising on any improvements in the trading environment will be the ability and willingness of business owners to plan ahead and act on opportunities, as well as monitor their company’s finances carefully.
“If cash flow becomes a major challenge, it is crucial to seek professional advice as soon as possible. There is a significant amount which can be done to rescue and support West Midlands businesses if help is taken early enough.”
