The total number of businesses in the North West has increased by 10% in 2016 due to a record level of start-ups, according to new research by the UK insolvency and restructuring trade body R3.
There are now 32,774 more businesses in the region than in December 2015, bringing the total number of active businesses to its highest ever level of over 347,200. While the rise was below the national average of 25%, the North West continued to outperform London where the number of companies grew by just 6%.
The figures, compiled from the BvD database, show that transport remains the fastest growing sector, with the number of businesses increasing by 46% during the year to over 6,500.
Sectors which showed double-digit increases included restaurants (25%), construction (15%), technology and IT (14%), and professional services (11%).
Richard Wolff, North West Chair of R3 and Head of Corporate Recovery and Insolvency at law firm JMW, said: “The figures reflect the start-up culture that has developed in the UK. People are becoming more entrepreneurial and are happy to run their own business or, in some cases, more than one!
“Whilst it is the technology sector that commands the greatest attention, with a whole range of exciting and innovative start-ups, the biggest growth in business numbers is coming from more traditional types of businesses, with different factors driving growth in each sector.
“The incredible rise in the number of transport firms is likely to be due to online shopping creating increased demand for couriers, as well as firms such as Deliveroo and Uber making it easier for individuals to set up alone. Food and drink has always been a popular choice for start-ups but the growth in restaurant numbers also reflects the fact that fewer such businesses are failing as the economy has returned to a degree of health.
“The rise in construction firms is driven by the buoyant property market, while in professional services, a whole range of new players has arisen as a result of successive waves of redundancies in previous years or simply individuals seeking to break out of the corporate world.
“However early-stage businesses are always more vulnerable to failure, and with so many jobs dependent on start-ups there needs to be greater emphasis on ways to support small firms and help entrepreneurs to develop better financial and management skills.”