New research from the specialist UK economic vitality monitor, Evaluate|Locate, shows that during 2022 an average of 106 UK businesses per day stopped trading. This represented a drop of 38,847 in the total number of active UK businesses.
Half of this total was driven by falls across London and the South East where there are now more than 21,000 fewer active businesses than a year ago, with net closures of 9,837 in the capital and 11,340 across the rest of South East.
This reflected falls in the total number of trading business of 1.9% for London and 2.6% for the South East. Only Scotland saw a deeper level of closures with 2.6% fewer businesses trading than a year ago.
In contrast, Northern Ireland was the only UK location to see upwards movement with a 0.8% uplift that equated to a net increase of 622 active businesses.
The nowcast findings were generated by Evaluate|Locate through analysis of the official filings of every UK registered business.
Adam Kirby, Head of Data & Insights at Evaluate|Locate said, “The last time this measure was consistently negative across a 12-month period was in January 2011 when the number of businesses had fallen by -2.0% in the aftermath of the financial crisis and ensuing recession.
“The only positive news is that the number of closures is now slowing and, at the current rate, could flatline by around Easter.”
Although London and the South East have seen a high level of business closures, declines in general economic vitality are now less pronounced in these areas than across most of the UK.
Kirby added, “What we’re seeing is the legacy of the pandemic and the impact of the recession – a brutal process that is reconfiguring economies.
“It will, of course, be no consolation to the businesses and the workforces which experience the collateral damage of closure, but what we may be seeing are the first hard steps along the road to a reshaped economy and eventual recovery.”
Working from postcode granularity upwards, Evaluate|Locate rates every location across the UK on the basis of 96 economic metrics which are grouped around business density; earnings; employment levels; average residential values; and population movements. From this it generates an Economic Vitality Index which rates every UK location and enables detailed comparative analysis.