North East sees decline in new business start-ups, R3 research shows
The number of new business start-ups in the North East dropped to one of the lowest levels of the year last month according to new research from R3, the UK’s trade body for restructuring, turnaround and insolvency professionals.
R3’s analysis of data from CreditSafe shows that the number of new businesses started in the region declined by 18% in November 2025 to 1,335 new businesses compared to October when there were 1,620 new start-ups.
The last time numbers dipped to that level was in February this year with 1,331 new firms however, numbers are up by 12% on November 2024 when there were 1,187 new business formations.
The region’s performance reflects a national trend, with start-ups declining across the UK, with the East Midlands, West Midlands and North West seeing the biggest declines in new business formations at 22% each.
But the number of insolvency-related activities, including liquidator and administrator appointments and creditors’ meetings, was down by 16% per month with 51 activities in November 2025 compared to 61 in October. However, levels remained steady year on year with 50 instances in November 2024.
Kelly Jordan, Chair of R3 in the North East and a partner at Muckle LLP, said: “The decline in new business start-ups suggests that entrepreneurial confidence is lacking in the region, amid a challenging economic climate. New and existing businesses are still digesting the autumn Budget and looking to adapt their strategies accordingly.
“There will undoubtedly be winners and losers from the Budget and we are only likely to see the impact in the coming weeks and months.
"The decision to lower business rates for some retail, hospitality and leisure businesses will provide a lifeline to many SMEs in sectors that continue to face significant financial pressures. Directors will also be hoping that measures aimed at easing cost-of-living pressures will help support consumer spending.
“On the other hand, businesses will need to factor in the increased costs of the minimum wage rise into their planning, as this may drive wider inflationary wage pressures across their workforces at a time when tackling persistently high inflation remains a priority.
“Given the ongoing uncertainty, directors must remain vigilant about the financial health of their companies. Whether a business is newly established or long-standing, it’s vital to monitor finances closely and seek early professional advice from R3 members if challenges begin to emerge.”