The number of new businesses set up in Wales rose by just over a quarter in July compared to a year earlier, according to new research from restructuring, turnaround and insolvency trade body R3. It also shows that firms becoming insolvent fell by nearly fifth (19.7%).
The data, provided for R3 by Creditsafe, reveals that 2,035 new businesses were set up in Wales in July – a 25.3 % rise on the 1,624 in July 2024.
Over the same period, the number of insolvency-related activities – which includes liquidator and administrator appointments and creditors’ meetings – fell from 71 to 57.
Bethan Evans, chair of R3 in Wales, said:“These figures suggest growing confidence in the Welsh business community. Start-up numbers in July were notably higher than in the same month last year, which indicates that more people are willing to take the leap into running their own business despite ongoing economic pressures.
“It is possible that rising unemployment may be encouraging some individuals to explore self-employment or start their own businesses.
“When traditional job opportunities are limited, setting up a new venture can be an attractive route, and this may partly explain the increase in start-ups we are seeing in Wales.”
On business failures she added:“The 19% year-on-year fall in insolvency-related activity is also significant shift and a welcome one, given the economic climate we are currently facing. Business costs sky-rocketed in April, inflationary pressures remain, and consumer spending is still cautious – especially on larger or non-essential purchases. Against this backdrop, it is encouraging to see fewer businesses encountering financial distress.”
On the current trading environment Ms Evans , who is also a partner with professional advisory firm Menzies, said: “It is important remember that the market remains uncertain and unstable. Many businesses are likely still under significant pressure, but may be relying on short-term measures to stay afloat while they wait to see if trading conditions or the broader economic picture improve.
“While it is positive to see new businesses emerging, directors must stay alert to the financial health of their firms. Whether a business is newly established or long-standing, it is important to keep a close eye on finances and to seek support as soon as any difficulties arise.
“Seeking advice early – before cashflow issues become critical – is still the best way to protect a business and its future.”
