The Business Growth Index UK

The business landscape in the United Kingdom is evolving rapidly, particularly with the significant rise in remote and work-from-home arrangements. But which regions and industries are experiencing the most business growth?

At Tapt, we set out to identify where business growth is happening in the UK. We analysed ONS data on business population estimates by location and industry from 2019 to 2024. Our research highlights the regions with the fastest-growing business registrations, as well as the industries seeing the most significant expansion.

Explore the findings below to see how your region compares and discover which industries could present the best opportunities for your next business venture.

Average business growth rate by country 

Between 2019 and 2024, Northern Ireland led the way with the highest average annual growth rate of 2.14%, resulting in an overall increase of 7.17%. Scotland also performed well, with an average annual growth of 1.89% and a 6.32% overall rise in businesses. In contrast, England experienced a steady decline, with the number of businesses falling by 7.65%, marking an average annual decrease of 1.53%. Wales remained relatively stable, with only a slight average annual decline of 0.11% and a less than 1% decrease overall. These figures demonstrate that while some parts of the UK experienced healthy business growth, others faced ongoing challenges.

This regional variation may reflect differing levels of economic resilience, targeted local government support, and the relative impact of Brexit and the COVID-19 pandemic on regional industries. The UK as a whole saw a decrease in the number of businesses operating across the nation, with an overall drop of 6.3%.

Average business growth rate by English region

Business growth across regions reveals a clear north-south divide. The North East emerged as the strongest performer, recording a 1.97% average annual growth rate and a 9.64% increase in the number of businesses. This large difference stems from a sharp decline during the COVID-19 pandemic, followed by a business rebound. The East Midlands also demonstrated resilience against the increasingly difficult business environment, with modest 0.34% growth over five years.

In contrast, London experienced a surprising 9.98% decline in business numbers, with an average annual decrease of nearly 1.98%. This may reflect high operational costs, post-pandemic shifts to remote work, and the relocation of businesses to more cost-effective regions. The situation was even more challenging in the North West and East of England, which saw sharper declines of 14.43% and 11.82%, respectively.

Average business growth rate by industry

When examining business growth across industries, only four of the 16 reported industries demonstrated a positive average annual growth rate over the six year period. Real estate emerged as the clear leader, with an impressive average annual growth rate of 4.99% and a total increase of over 26.24%. This substantial leap suggests strong demand for property services and a post-pandemic rebound in both residential and commercial real estate. 

Despite the real estate industry seeing the most growth, the 'Construction' industry experienced the steepest decline, with an average annual drop of 3.41% and a significant overall decrease of 16.11% since 2019. This downturn likely reflects a combination of rising material costs, interest rate hikes, skilled labour shortages, and project delays, all of which have created a challenging environment for the industry.

Industries like 'Other Services' (which encompasses activities that don’t fit into other categories, such as home repairs, hairdressing, professional membership organisations, and physical well-being activities) and ‘Accommodation & Food’ also showed growth, albeit much slower than the ‘Real Estate’ industry, at 8.15% and 5.11% respectively. Meanwhile, ‘Professional, Scientific & Technical Services’, traditionally seen as a stable sector, experienced a surprising overall decrease of 13.02%. This decline demonstrates that even white-collar industries are not immune to broader economic pressures and shifting workforce dynamics.

Average business growth rate by size 

Businesses with no employees, such as sole traders and freelancers, fell by 8.66% overall, with an average annual decline of 1.72%. The number of small businesses followed a similar pattern, dropping by 6.38%, which equates to an annual fall of 1.27%. This decline was largely driven by the effects of a weakened economy, which reduced consumer spending and made it harder for small businesses to stay afloat. On the other hand, medium-sized enterprises and large corporations saw slight growth, both increasing by just over 6.00%. Overall, the total number of private sector businesses decreased by 6.29%, indicating that while larger companies managed to grow, smaller and non-employing businesses faced more challenges.

Elon Datt, Founder and CEO at Tapt comments:  

“Our analysis reveals a stark divergence in business growth across the UK, with Northern Ireland and the North East showing resilience and expansion, while regions such as London and the North West face sharp declines. Traditional sectors, like construction and professional services, have clearly struggled, likely due to increased costs and labour shortages. Notably, medium and large businesses are growing, but smaller enterprises and sole traders continue to bear the brunt of a weakened economy making it harder for small businesses to stay afloat.

“For anyone thinking about starting a business, now is a great time to look beyond the traditional hotspots. These areas are developing into lively local business communities, and getting involved in those networks can be a huge advantage. Whether it’s joining local business groups, attending events, or simply connecting with other entrepreneurs nearby, networking in these growth areas can open the door to valuable partnerships, referrals, and support.”

About the data 

Our research investigates where in the United Kingdom businesses have grown or declined the most, based on a five-year time series of official government data. The aim is to identify the regions, industries, and business sizes that have seen the most significant changes in business activity between 2019 and 2024.

To conduct this analysis, we examined official government datasets from the Office for National Statistics (ONS) business population estimates from the United Kingdom, covering annual data on the number of businesses by industry group, business size (by number of employees) and region/country. Note that business estimates have been rounded and therefore regions, industries and business size may not sum to total.

In total, the analysis covers thousands of geographic-industry-year data points, enabling comparisons across countries, regions, and economic sectors. The data measures the number of operating businesses at the beginning of each calendar year (e.g. the 2023 count reflects the number of businesses operating on 1 January 2023).

Regional and country-level comparisons were drawn using ONS-defined areas such as North West England, London, Wales, and Scotland. All industry and size breakdowns reflect businesses active in the UK private sector.

Business size was categorised using the number of employees, according to ONS employment size structures. Employee size bands used to categorise business size were:

• Non-Employing

• Small Business: 1 to 49

• Medium-sized enterprise: 50-249

• Large corporation: 250 or more