R3 Southern & Thames Valley: New figures show start-ups on the wane

WINDING-UP WARNING: Southern and Thames Valley R3 chairman Garry Lee

START-UP FIGURES: Southern and Thames Valley R3 chairman Garry Lee says falling numbers of start-ups are a cause for concern

Start-up numbers have slumped in the South East as business confidence is buffeted by economic uncertainty, according to R3, the insolvency and restructuring trade body.

There was an 18% fall in new businesses in the region from March to April – a drop from 6,948 to 5,721.

The drop was revealed in R3’s analysis of latest data supplied by business intelligence provider Creditsafe.

Insolvency related activity for companies remained broadly level – dropping slightly from 277 in March to 266 in April.

Garry Lee, chair of R3’s Southern and Thames Valley region, said: “Start-up figures are a key indicator for the health and vitality of an economy.

“The month-on-month fall demonstrates that business confidence remains fragile and continues to be buffeted by persistent high inflation.

“Some people may be thinking twice about starting a new business in the current climate and holding fire until inflation falls and greater economic stability emerges.”

Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “However, it is not all doom and gloom.

“Start-up figures in the South East remain higher than all regions of the UK apart from Greater London, East Anglia and the North West.

“Insolvency related activity is also down slightly month on month, which gives hope that we may see numbers plateauing rather than continuing to increase.

“Directors and business owners in the South East are advised to remain vigilant in the months ahead and watch out for any signs of financial distress.

“Rising stock, problems paying staff or suppliers and cashflow issues are all indicators that a business is struggling.

“These are among the warning signs that it is time to seek advice from a qualified and regulated source as soon as possible.

“The earlier issues are addressed, the more options become available for a better outcome.”

The Creditsafe data also showed that the number of late payments for companies awaiting money continued to fall, from a total of 504,216 unpaid late invoices in March to 503,757 in April.

Furthermore, the number of companies owing money in excess of agreed credit terms also dropped slightly from 59,027 in March to 58,668 in April

Insolvency related activity includes administrations, creditors’ voluntary liquidations, compulsory liquidations and company voluntary arrangements.

Creditsafe is a multinational business intelligence expert with services including company credit scores and credit report information.

R3’s Southern & Thames Valley region includes Buckinghamshire, Oxfordshire, Hampshire, the Isle of Wight and Berkshire.