Number of firms rises as North beats UK trend

Dec 22 2009 by Peter McCusker, The Journal

THE number of businesses in the North East rose last year despite the economic slowdown and the region's business stock grew at one of the fastest rates in the UK.

The region has seen the number of firms grow at a faster rate than the national average for seven years and last year there was a 1.5% jump to 63,000, where there was no change across the UK where there are still around 2.3 million firms.

A One North East spokesman said: “This shows the underlying strength of the North East economy going into the recession and bodes well for the region emerging stronger to take advantage of the upturn when it arrives from what has been a very challenging past 12 months.”

In 2008 8,000 new business were created in the region at a growth rate of 12.2%, which is the highest in the UK apart from London. However, the failure rate of the region’s businesses came in at 9.9%, which was also higher than the national rate of 9.4%.

Carole Beverley, chief executive of the Entrepreneurs' Forum, said: “It’s very encouraging to see yet another increase and that the North East is ahead of other regions.

“But I don’t think we shouldn’t be surprised – as a region, we have people with talent, ideas, business skills, ambition and, very clearly, a positive approach.

“And as many traditional career routes are imploding more and more people are intent on self-determination – taking control of their own destiny.”

While 2009 has also been a tough one for the region’s business community Ms Beverley added: “No-one is ever going to suggest that setting up and growing a business is ever going to be anything less than hard work and that’s compounded at a time when many business are facing challenges that they’ve never experienced.

“But some would argue that it’s the best time to be starting with many reporting strong increases in business as they are able to strongly differentiate themselves from the competition.”

Small businesses in Newcastle are weathering the financial storm to head into 2010 in better financial health than this time last year, according to the findings of a new study.

The O2’s Small Business Confidence Index questioned nearly 500 small business owners and the findings revealed that a quarter of the business questioned said they are now financially stronger than a year ago, and almost one third said they feel more confident now than this time last year.