Amid the January gloom, Yorkshire and the Humber is seeing cautious signs of economic optimism with levels of insolvency-related activity showing a slight fall between November and December 2023.
The region experienced an 11.7% month-on-month drop in insolvency-related activity, representing 248 businesses, according to the latest research from the UK’s insolvency and restructuring trade body, R3, based on an analysis of data provided by CreditSafe.
Looking across the UK, two-thirds of the 12 regions and nations experienced a fall in this type of activity (which includes liquidator and administrator appointments and creditors’ meetings) in December compared with the previous month. The most marked decreases were in the North East (with a fall of 16.9%), East Anglia (down by 15.3%), Wales (-13%) and the North West (-12.1%). In contrast, the highest rises were in Northern Ireland (with a 52% uplift), Scotland (17.1% increase), the South East (up by 11.4%) and the East Midlands (up by 7.6%).
Another indicator of economic health, the number of start-ups, showed a more concerning picture with all regions and nations seeing a decrease month-on-month. The strongest performances were in Northern Ireland with a drop of just 2%, while all of the others saw double-digit falls, the highest being in the North East with fall of 26%. Yorkshire and the Humber was fairly resilient with 3,902 new businesses launching last month, an 18% drop since November 2023.
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, commented: “While it is encouraging to see a slight fall in insolvency-related activity in the majority of regions and nations, this has to be seen in seasonal context as December is traditionally the busiest time of year for many sectors. However, it is always good news that Yorkshire and the Humber is performing relatively strongly.
“Despite some retailers reporting a busy Christmas shopping season, for many sectors, the longer-term picture remains one of little prospect of growth in the near future. The ongoing strain on households is evident as costs continue to rise, and a technical recession remains a possibility later this year. Amid these fairly gloomy economic prospects, businesses would be well-advised to watch cash flow closely and seek advice from qualified insolvency professionals at the first signs of problems when the most options will be available to prevent them from escalating.”