North East sees surge in new businesses as insolvency activity eases, R3 research shows
The number of new businesses set up in the North East rose by 12.9% in July 2025 compared to the same month last year, while insolvency-related activity in the region fell by 16% over the same period, according to new research from R3, the UK’s restructuring, turnaround and insolvency trade body.
R3’s analysis of data provided by Creditsafe shows that 1,569 new businesses were set up in the North East in July – a 12.9% increase from July 2024’s total of 1,390.
Over the same period, the number of insolvency-related activities – which includes liquidator and administrator appointments and creditors’ meetings – fell from 94 to 79, a 16% drop.
Kelly Jordan, Chair of R3 in the North East, says: “These figures suggest growing confidence in the region’s business community. Start-up numbers in July were notably higher than in the same month last year, which indicates that more people are willing to take the leap into running their own business despite ongoing economic pressures.
“The 16% year-on-year fall in insolvency-related activity is a significant shift and a welcome one, given the economic climate we are currently facing. Business costs sky-rocketed in April, inflationary pressures remain, and consumer spending is still cautious – especially on larger or non-essential purchases. Against this backdrop, it is encouraging to see fewer businesses encountering financial distress.”
Kelly, who is a partner at Muckle LLP, adds: “It is important remember that the market remains uncertain and unstable. Many businesses are likely still under significant pressure, but may be relying on short-term measures to stay afloat while they wait to see if trading conditions or the broader economic picture improve.
“While it is positive to see new businesses emerging, directors must stay alert to the financial health of their firms. Whether a business is newly established or long-standing, it is important to keep a close eye on finances and to seek support as soon as any difficulties arise.
“Seeking advice early – before cashflow issues become critical – is still the best way to protect a business and its future.”