Two Welsh areas among UK’s toughest places for businesses to survive

Nation.Cymru staff

Two Welsh council areas are among the toughest places in the UK for businesses to survive, according to new research.

A study of business closures has ranked Torfaen and Rhondda Cynon Taf among the 10 local authority areas where firms face the greatest risk of shutting down.

The research, by insurance firm Alan Boswell Group using Office for National Statistics business demography data, assessed areas using business closure rates, five-year survival rates and whether more businesses opened than closed.

Torfaen ranked third in the UK, behind Mansfield and Blackpool. Almost one in six businesses (15.9%) closed during 2024, while the area also recorded more closures than new business openings.

Rhondda Cynon Taf was ninth in the rankings. Its business closure rate stood at 11.7%, while just 34.5% of firms established in 2019 were still trading five years later.

The picture was more positive elsewhere in Wales.

Powys was ranked the sixth least risky area in the UK, with a closure rate of 6.7%, a five-year survival rate of 50% and more businesses opening than closing during 2024. Gwynedd also featured in the 10 lowest-risk areas, placing seventh with a five-year survival rate of 55.2%.

Heath Alexander-Bew, Personal Lines Director at Alan Boswell Group, said: “When almost one in five active businesses in an area close in a single year, it shows just how much pressure some local firms are under.

“For most small business owners, shutting down is not a quick decision. It usually comes after months of dealing with higher costs, quieter trading, late payments, staffing challenges or unexpected expenses.

“What is concerning about places like Mansfield, Blackpool and Torfaen is that the pressure is showing in more than one way. These areas are not only seeing high closure rates, but in some cases more businesses are closing than opening. That can have a real knock-on effect locally, from empty units on high streets to less confidence among other business owners.”

The study excluded regional and national totals and ranked local authority areas using three measures: the proportion of businesses that closed during 2024, the percentage of firms launched in 2019 that were still trading five years later, and the balance between business openings and closures.

Closure rates accounted for 40% of the overall score, with five-year survival weighted at 35% and the balance between openings and closures making up the remaining 25%.