The fall was the second highest in the UK, only topped by Greater London
Yorkshire and Humber businesses navigated tough times last year to see one of UK’s biggest falls in insolvency activity, new data has revealed. The latest R3 Annual Business Health Report has been published by R3, the trade body for restructuring, turnaround and insolvency professionals, uncovering insolvency and start-up activity within the regions, while highlighting sectors under financial stress, and exploring key business pressures.
Supported by data from CreditSafe, R3’s report shows insolvency activity – which includes administration and voluntary and compulsory liquidations – decreased by 9.9% across Yorkshire and the Humber in 2025. The fall was the second highest in the UK, with only Greater London, with an 11% drop, seeing a bigger reduction, followed by the North East with a 9.3% drop.
Areas seeing the biggest jumps in insolvency activity included Northern Ireland and Wales, at 20.2% and 11.7% respectively. While insolvency activity decreased in Yorkshire last year, the region’s performance in terms of new business start-ups was less positive. New start-ups In Yorkshire fell by 8.4%, with 49,605 new businesses registered in 2025.
Only Northern Ireland saw a bigger drop in the number of new businesses, down by 35.3% to 10,781. The report also looked at sector trend, with the UK picture suggesting a fragile operating environment for many local businesses.
Construction continued to account for the highest number of insolvency activities in the UK in 2025 (4,584 cases), despite a modest reduction of 6% on the previous year. The sector was exposed to rising material costs, delayed payments, skills shortages and weak investor confidence.
Construction sector companies to enter administration last year included Kingston Modular Systems, in Hull, which collapsed in September with the loss of 62 jobs. Sheffield based National Timber Group, which had bases across England and Scotland, went into administration in September, but parts of the business have since been rescued.
Meanwhile, Hull construction specialist Tucker Mechanical and Electrical Building Services closed operations in October after more than 50 years of trading.
Wholesale and retail (4,124 cases) and accommodation and food services (3,831 cases) also saw increased insolvency activity, reflecting pressure on margins as households reined in discretionary spending and businesses struggled to absorb or pass on higher costs. Manufacturing insolvencies also remained historically high with 2,188 cases, as companies contended with energy costs, supply chain disruption and subdued export demand.
Dave Broadbent, chair of R3 in Yorkshire and partner at BTG, said: “Despite the drop in insolvency activity locally, the R3 report shows that businesses, both regionally and nationally, are struggling to regain their footing in 2025 after several years of economic challenges. While inflation has now eased, the cumulative impact of higher costs, tighter credit conditions and weak demand continues to place significant pressure on local companies, particularly smaller and mid-sized firms with limited financial headroom.
“As we move into 2026, while cashflow and profit margins remain under pressure, seeking professional advice at an early stage from an R3 member can make a critical difference, giving viable businesses the best chance of survival and recovery.”






