UK start-up index reveals the regions thriving since Brexit
The West Midlands has defied Brexit uncertainty with the highest number of new businesses since the EU referendum, according to new figures by UK credit check specialist Creditsafe.
The company’s UK Start-up Index revealed which regions have suffered and which have benefited since the referendum result was announced in June 2016. The West Midlands came out on top with a 21% increase in new businesses from May 2016-April 2019, while Wales saw an 18% decrease over the same period.
The West Midlands recorded 54,241 start-ups from May 2016-April 2017, rising to 65,762 in 2018- 2019. Greater London and Northern Ireland also flourished, with a 13% increase in new businesses; the South West and Scotland joined Wales at the bottom of the table.
Creditsafe also gathered data on the number of insolvencies and found the West Midlands to have had the fewest insolvencies over the past three years, although the figure had still increased by 10%. Northern Ireland saw the biggest rise with a 114% increase in the number of failing businesses in the area.
Trampoline park business Rush UK was established in 2016 and opened its second venue in Birmingham, only five months after the Brexit vote. CEO Sam Williams said: “As a business we don’t rely on European trade, however we were still impacted by Brexit due to the weakening of the pound against the dollar affecting our supply costs, but this didn’t impact our decision to open the business in November 2016.
“Our staff retention and motivation rates in the Birmingham park are very high and this has played a crucial role in the success of the business. From the moment Rush Birmingham opened in 2016 it was an immediate success and outperformed our Rush High Wycombe park by 20%. During half-term in February 2017, for example, we saw our highest footfall of over 2,000 visitors in one day.”
Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce, said: “The Start-up Index from Creditsafe, on the face of it, does paint a welcome rosy picture for businesses in the West Midlands and it is pleasing that the region has performed so well since the referendum.
“But for the future, much will depend on how quickly Boris Johnson and the new government applies every effort to finding a way forward on Brexit that also enables businesses and the economy to flourish.”
Comparing the total number of start-ups in each region from in 2016/17 and 2018/19, the percentage increases/decreases were as follows:
West Midlands – 21.24%
Greater London – 13.42%
Northern Ireland – 13.08%
North East – 9.99%
Yorkshire and Humberside – 8.14%
East Midlands – 5.92%
North West – 3.98%
South East – 2.33%
East Anglia – 2.09%
South West – 0.59% (-)
Scotland – 3.25% (-)
Wales – 18.56% (-)
Professor Roger Awan-Scully, head of Politics and International Relations at Cardiff University, said: “Although there continue to be many uncertainties about the economic risks associated with Brexit, much of the UK economy seems to be impressively robust.
“What we don’t yet know is how business and the broader economy might be affected if a No Deal Brexit starts to seem inevitable. Many businesses currently rely on single-market access, often in subtle and un-noticed ways: what will be the consequences if that ceases suddenly?”
Chris Robertson, CEO at Creditsafe, said: “While all regions have seen an increase in insolvencies since 2016, it’s fantastic to see that budding entrepreneurs have not been deterred by the outcome of the EU referendum and the impasse it has caused.
“Business owners up and down the country are still planning ahead and remain tenacious, with the West Midlands really leading the way when it comes to defying the uncertainty and riding out the storm.
“We can only hope that economic stability resumes sooner rather than later, and with that the confidence for more people to start their own business, particularly in those regions that have been most negatively impacted by Brexit.”