South East: Business numbers grow in ‘powerhouse’ economy

Business numbers in the South East rose by more than 15,000 over the past year, according to latest research by insolvency and restructuring trade body R3’s Southern & Thames Valley region.

The figures show the number of active firms in the region increased from nearly 542,000 in January 2019 to over 557,000 in January 2020.

That was the third highest regional rise in the UK, behind London, nearly 35,500, and the West Midlands, just under 18,500.

It was also more than three times the corresponding South East growth of 4,900 for the previous year, from January 2018 to January 2019.

Overall, the South East has the greatest number of active businesses (over 557,000) of any UK region outside of London.

London has a total of nearly 960,000 active firms, according to R3’s figures for January.

Meanwhile, the UK total of active companies stands at nearly 3,784,000 for January 2020 – up from almost 3,647,000 in January 2019.

The growth was revealed in R3’s January risk tracker, which showed that 44.8% of all firms in the South East were judged to have a higher than average risk of insolvency.

This percentage was unchanged from December 2019, and remained the highest of any region in the UK.

Garry Lee, chairman of R3’s Southern & Thames Valley committee and senior manager for recovery and restructuring services at accountancy firm Smith and Williamson, said: “The South East continues to be a powerhouse for the UK economy.

“Its performance over the past 12 months demonstrates the resilience and strength of the region despite some considerable headwinds during a prolonged period of uncertainty.

“The expansion and pace of growth in business numbers is encouraging as we enter a new year, and a new decade.

“There will undoubtedly be some challenges ahead as well as opportunities for businesses in the South East to show their entrepreneurialism and continue to drive the regional and national economy.”

The majority of sectors in the South East monitored by R3 held steady in the January insolvency risk tracker compared to figures for December.

However there were slight improvements for the hotels, technology and IT, construction, professional services, retail and tourism sectors.

R3’s insolvency risk tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balance sheets, director track records and other information to work out their likelihood of survival over the next 12 months.

Lee said: “The first quarter of any new year can be challenging for businesses, especially start-ups.

“Seeking expert advice from a qualified and professional source at an early stage is crucial if issues arise.

“This will mean more options will be available for business owners to address difficulties and resolve them where possible.”

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