The North East recorded one of the UK’s sharpest declines in start-up activity in Q2 2026 and was one of the few areas of the UK to see insolvency-related activity increase, according to an R3 report.
R3’s latest Quarterly Business Health report, based on data from Creditsafe, found that 4,022 new companies were registered in the North East during Q2 2026, 9% lower than the same period last year (4,420) and 4% down on the previous quarter (4,209). This was the third largest year-on-year decline in start-up activity of any UK area behind only Northern Ireland and Wales.
The North East also saw a rise in insolvency-related activity during the quarter. There were 211 insolvency-related activities in Q2 2026, up 5% on Q2 2025, although broadly unchanged from the previous quarter’s total of 209. This differed from the national trend which saw insolvency activity fall by 6%.
“R3’s latest Business Health report suggests many would-be entrepreneurs are taking a cautious approach to launching new ventures. That is a concern because sustainable economic growth depends on a healthy pipeline of new businesses entering the market.
“Businesses continue to face a range of pressures, from higher employment costs and geopolitical uncertainty to concerns around consumer demand and cashflow. Together, these factors can make starting a business feel like a greater risk than it might have done previously.
“With insolvency-activity increasing, business owners should continue to monitor cashflow carefully and seek professional advice early from an R3 expert if financial pressures begin to build.’
The latest figures mirror the national picture on start-ups, with new UK company registrations falling by 6% year-on-year to 184,873 in Q2 2026 and by 2% compared with the previous quarter. However, the North East diverged from the national trend on insolvency-related activity across the UK which fell by 6% this quarter to 6,854 cases.
