While thousands of new companies are established in the UK each month, the country’s business activity is witnessing a slowdown. According to the Office of National Statistics, the second quarter of 2023 is the eighth quarter in a row with more business closures than creations, at 84,150 vs 77,095. In addition, there is a staggering decrease in the number of newly established companies: 12,775 fewer businesses were registered in the second quarter of this year than the same period in 2022.
But how are individual localities in the United Kingdom handling the economic situation and are there any cities where the business climate is trending positively? The team at BestBrokers analysed the latest edition of quarterly statistics on business births and deaths from the Inter-Departmental Business Register (IDBR) provided by the ONS and compiled rankings of the most and least business-active localities in the UK.
Methodology
The current report ranks UK locations with the highest and lowest business births per capita ratios in the year preceding June 2023. We calculated the quoted rates based on 100,000 residents. Figures are current as of the last population estimates for the UK, England, Wales, Scotland and Northern Ireland published by the ONS on 21 December 2022.
Data was collected for a total of 375 localities (council areas, metropolitan, non-metropolitan and local government districts, unitary authorities, and London region boroughs), all explicitly confirmed by the ONS.
UK Areas with the Most Business Creations per Capita
In addition to new business information about individual localities in the UK, our team collected the average figures for Wales, Scotland, Northern Ireland, and England’s nine regions: London, the North East, North West, Yorkshire, East Midlands, West Midlands, South East, East, and South West.
Of these, the London region recorded the most business creations in the year preceding June 2023 at 62,830 and also has the highest per capita ratio of 714 business births per 100,000 residents. Therefore, it is no surprise that the region is home to 13 of the 15 most business-active administrative areas in the UK.
With a population of 8,618 residents, the City of London recorded 1,725 new company registrations between June 2022 and June 2023, which pushes its business birth rate to 20,016 per 100,000 residents. This score far surpasses Westminster and Camden which make up the top three with per capita ratios of 2,904 and 1,450 new businesses per 100,000 individuals.
Two other London boroughs, Kensington & Chelsea and Hackney, hold the fourth and fifth positions with regard to the number of business creations per 100,000 residents. With populations of 143,940 and 259,956, these administrative areas had 1,365 and 2,460 newly established companies within the study period. As a result, the two boroughs have similar per capita ratios of 948 and 946 business births per 100,000 individuals, respectively.
Hertsmere in the East and Maidstone in the South East of England are the only non-London locations in the top 15 with the highest number of business births per capita. They registered 835 and 785 business creations to June 2023 which amounts to per capita ratios of 772 and 735 per 100,000 residents.
Wales, Scotland, and Northern Ireland lie well behind. The Wales unitary authority of Torfaen sits at the top, with a business births per capita ratio of 638 per 100,000 individuals. Cardiff had more than twice as many newly established companies, at 1,625 vs 590, but its per capita ratio of 123 per 100,000 places the unitary authority second in Wales.
Glasgow City is Scotland’s most business-active locality with 424 newly established companies per 100,000 residents, while Fermanagh and Omagh is Northern Ireland’s top-performing local government district with 325 business births per 100,000 residents.
UK Localities with the Fewest Business Births per Capita
The business births per capita ratio clearly demonstrates the differences in business climates across the UK. According to our research, the worst performing locality is Antrim and Newtownabbey in Northern Ireland, which had 185 new companies per 100,000 residents within the year preceding June 2023. This ratio is more than 15 times lower than in Westminster where 2,904 new businesses per 100,000 individuals were registered within the same period.
A further four local government areas in Northern Ireland are among the 15 UK localities with the lowest business births per capita ratios. These are Ards and North Down, Lisburn and Castlereagh, Derry City and Strabane as well as Causeway Coast and Glens having registered just 211, 231, 232, and 236 new companies per 100,000 residents, respectively.
With a per capita ratio of 310 new companies per 100,000 individuals, Scotland provides a slightly more favourable business climate than Northern Ireland where the ratio is 261 per 100,000. However, Scotland is home to 6 of the 15 locations where starting a new business seems to be the hardest. North Ayrshire has the lowest per capita ratio of 238 new businesses per 100,000 residents, followed by Clackmannanshire, West Dunbartonshire, Fife, Dumfries and Galloway, and Inverclyde, which have per capita ratios ranging between 243 and 254 new companies per 100,000 individuals.
Despite having the best average business births per capita ratio of 453 per 100,000 residents, England has three localities among the least favourable areas in the United Kingdom. Copeland, located in the North West, has the third-lowest per capita ratio in the UK, with 223 newly established companies per 100,000 individuals. In the year preceding June 2023, Gosport and Barrow-in-Furness registered 243 and 245 business births per 100,000 residents, respectively.
Blaenau Gwent is the only Welsh locality with a markedly low number of business births per capita. The unitary authority registered 254 new companies per 100,000 individuals, the same figure as Inverclyde in Scotland.
You may find the raw data here.