West Mids businesses account for 7% of administrations in 2025, analysis reveals

Business failures in the West Midlands reached 7% of all UK administrations in 2025, making it the fifth-highest region for corporate insolvencies – according to analysis by full-service law firm Shakespeare Martineau.

A total of 120 businesses in the region entered administration last year. Across the UK, 1,631 companies filed for administration in 2025 – a 5% decline compared to 2024 – data from The Gazette Official Public Record shows. Despite this slight easing, the figure remains 22% above 2022 levels, highlighting ongoing pressures on UK businesses amid a cautiously stabilising economic environment. 

Retail emerged as the hardest-hit sector, with filings jumping 24% from 237 in 2024 to 293 in 2025. Greater London continued to record the highest number of business failures, with 390 administrations last year, slightly down from 393 in 2024. 

Andy Taylor (pic.), partner and head of restructuring at Shakespeare Martineau, said: “While the year-on-year drop in administrations is worthy of note, the overall picture for business remains challenging. 

“With 1,631 appointments being made, we are still seeing more businesses enter administration than in 2021 and 2022, and distress remains widespread across multiple sectors and regions.” Along with retail, hospitality, manufacturing, real estate and construction were the worst-hit sectors, collectively accounting for 56% of all administrations. 

All sectors, apart from retail, saw a slight decline in filings compared to last year.  Andy said: “The retail sector remains under significant pressure. 

“Despite a slight easing of inflation and interest rates, consumers remain cautious and price-sensitive. Footfall continues to lag and many businesses have not been able to adapt to the new retail landscape. 

“The drop in filings in hospitality, manufacturing, real estate and construction could be the result of earlier failures having already removed the weakest operators. It may also reflect a slowdown in activity, with firms putting investment and hiring decisions on hold due to continued uncertainty.” 

Geographically, Greater London filings fell 1% (393 to 390). The North West increased by 15% to 286, along with the South East by 11% to 207. Yorkshire and the Humber (121) and the West Midlands (120) made up the rest of the top five. 

Andy said: “While Greater London continues to record the highest number of administrations, the regional picture is becoming more mixed. 

“The increases in the North West and South East suggest that financial distress is spreading beyond the capital, particularly in areas with high concentrations of consumer-facing and industrial businesses. This underlines that the challenges facing companies are not confined to one region and that pressures remain widespread across the UK economy.” 

Despite an overall drop in administration volumes, Andy warned businesses not to be complacent.  He said: “These figures, while worthy of note, do not detract from the fact that the trading environment for many businesses remains highly challenging.

“Many companies are surviving through short-term fixes, but without sustained growth, improved consumer confidence and better access to funding, there are still choppy waters to navigate. Geopolitical uncertainty, post-election policy shifts, energy costs, the aftermath of the recent budget, and continued weak economic growth are still creating an unpredictable environment for business.

“Firms must remain agile and, above all, proactive. Our advice remains unchanged – seek expert help early.

“The sooner directors act, the more tools are available to protect the business and find a viable path forward.”