Businesses in the North East
In March 2023 there were 54,815 VAT or PAYE registered private sector enterprises within the North East LEP area. The latest North East total was equivalent to 443 private sector enterprises per 10,000 working age adults, compared to 615 for England excluding London. If the rates were identical there would have been over 21,000 additional enterprises in the North East.
Almost 74% of enterprises in the North East were micro-businesses with zero to four employees. This proportion was lower than that for England excluding London (77%) and the lowest among the eight core city LEP areas.
Recent trends
The number of North East private sector enterprises in 2023 was 2.4% higher than 2020, the third highest percentage increase among the eight core city LEP areas. This compared to an England excluding London decrease of 0.8%.
The latest North East total is 12.0% higher than in 2015, the earliest date for which comparable data is available. This is a slightly higher increase than for England excluding London (10.4%).
Within the North East, the highest percentage increases in private sector enterprises in the latest year were in Newcastle and Sunderland, while numbers decreased in South Tyneside. The highest percentage increase since 2015 was also in Newcastle.
Broad industry groups
The North East has a different broad industry breakdown of private sector enterprises to England excluding London. Although the construction, wholesale and the professional, scientific and technical services sector are the largest sector in both areas, the percentage of North East enterprises within them is smaller. The North East also has comparatively small percentages within information and communication and many more businesses in accommodation and food services.
Since 2020 there has been a large decrease in the number of information technology businesses, which may be linked to the introduction of the contractors “off payroll – working rules” changes (IR35) by HM Revenue and Customs. There has also been a relatively large decline in the number of professional, scientific and professional occupations.
In absolute terms the sectors with the largest number of new enterprises since 2015 have been transportation and storage, construction and administrative and support services.