The number of new business start-ups in the North East dropped to one of the lowest levels of the year last month, according to new research.

R3, the UK’s trade body for restructuring, turnaround and insolvency professionals, analysed data from CreditSafe which revealed that the number of new businesses started in the region declined by 18 per cent in November to 1,335.

This was down from 1,620 in October. The last time numbers dipped to that level was in February this year with 1,331 new firms; however, numbers are up by 12 per cent on November 2024 when there were 1,187 new business formations.

The region's performance reflects the national trend, with start-ups declining across the UK. On a positive note, the number of insolvency-related activities – including liquidator and administrator appointments and creditors' meetings – was down by 16 per cent.

Kelly Jordan, chair of R3 in the North East and a partner at Muckle LLP, said: "The decline in new business start-ups suggests that entrepreneurial confidence is lacking in the region, amid a challenging economic climate. New and existing businesses are still digesting the autumn Budget and looking to adapt their strategies accordingly.

"There will undoubtedly be winners and losers from the Budget and we are only likely to see the impact in the coming weeks and months. The decision to lower business rates for some retail, hospitality and leisure businesses will provide a lifeline to many SMEs in sectors that continue to face significant financial pressures.

“Directors will also be hoping that measures aimed at easing cost-of-living pressures will help support consumer spending. On the other hand, businesses will need to factor in the increased costs of the minimum wage rise into their planning, as this may drive wider inflationary wage pressures across their workforces at a time when tackling persistently high inflation remains a priority."