Sunderland may be the worst place to do business in the UK. The North East city came bottom of Centre for Cities report today which analysed amongst many -many-other things the number of businesses opening and closing.
It saw a 5.6% drop in its churn rate (which tracks businesses opening and closing against the total amount of business stock.
It was closely followed by Plymouth, Mansfield and Middlesbrough.
Aberdeen surprisingly was the only city to see more businesses open than close which might give some of the pro-devolution camp in Westminster pause for thought.
London continued to be the power house of the UK. It was named best business location seeing the most companies opening up and having the most business stock.
You can read the full report here.
Picture by pauldwaite on Flickr
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Unfortunately this article has misinterpreted what the data shows.
The business start-ups data shows exactly that - the numbers of new busiensses created. This is not a reflection of a city as a business location. To make a judgement on this we would need data on the movement of businesses in and out of all cities.
Instead the data suggests that levels of entrepreneuship are lower in these cities, which may be a reflection of a number of factors. We would appreciate it if this article was adjusted to reflect this.
Paul Swinney
Centre for Cities
Hi Paul,
Thanks for your comments, but I would argue that the data wasn't misinterpreted.
Yes, I agree that one way of making a judgement on a city as a business location would be to look at the movement of businessess in and out of all cities. But there are others.
As you've stated, your data shows the number of new businesses created but it also shows the number of businesses that close. Your churn rate takes both these into account along with the total office space available. If there are more businesses closing in a city than opening as a function of the total office space I would argue this indicates businesses in that city are not as successful as those elsewhere.
Nadia Elghamry
Estates Gazette
The poor churn rate of a city could reflect a number of things such as poor business management or the structure of the economy (which may have left it more exposed to the downturn).
But this doesn't mean that "Sunderland may be the worst place to do business in the UK". A poor place to do business surely would be somewhere where planning departments are slow, transport links are poor, rateable values are unjustifiably high and local government bureaucracy hampers business.
And we definitely didn't do this: "Sunderland named worst UK business location"!
Hi Paul,
The figures do indicate however, the strength of the local economy to quote your report:
"Strong city economies depend on the dynamism of
businesses and entrepreneurs. The overall numbers of
businesses in a city and the rates at which businesses
are starting up and closing down are key indicators of the
health of a city’s economy."
The comment that Sunderland may be the worst place to do business in the UK was definitely not attributed to Centre for Cities. However, off the back of your last comment I agree on the headline and will change this.