The number of UK businesses forced into liquidation has surged to its highest level since 2012, with higher taxes and rising costs squeezing companies nationwide. Compulsory liquidations, where creditors petition the courts to shut down businesses unable to pay their debts, hit 3,730 in 2022 – the highest figure in more than a decade.
Yet, even in the face of a sluggish economy, certain sectors and areas in the UK are showing remarkable resilience and growth.
Keen to find out, commercial law experts at LegalVision analysed ONS Business Demography statistics, examining business formations and closures across industries from 2022 onwards. The study reveals the sectors experiencing the strongest growth, as well as the regions offering the best opportunities for new and expanding businesses.
Key findings:
- The human health sector leads as the fastest-growing sector in the UK, boasting an impressive average net growth rate of 4.78%.
- Despite the ongoing threats to their survival, creative industries are booming, with the TV production and music publishing sector, as well as the wider creative, arts and entertainment sector, all ranking among the top ten fastest-growing.
- London boroughs dominate business growth, with Hackney, Islington and Camden claiming the top three spots for the strongest growth over the three-year period.
- Robert Nay, Practice Group Leader at commercial law firm LegalVision, shares four key tips for business owners to strengthen resilience and thrive in a challenging economy.
The UK’s fastest-growing sectors revealed – Six of the top ten hit peak growth in 2023
| Rank | Industry | Net Business Growth Rate 2022 | Net Business Growth Rate 2023 | Net Business Growth Rate 2024 | Avg Net Growth Rate (2022-2024) | Growth Score (/10) |
| 1 | Human health activities | 3.66% | 6.15% | 4.54% | 4.78% | 9.86 |
| 2 | Motion picture, video and television programme production, sound recording and music publishing activities | 4.01% | 5.12% | 3.59% | 4.24% | 9.73 |
| 3 | Real estate activities | 2.87% | 3.63% | 4.02% | 3.50% | 9.59 |
| 4 | Electricity, gas, steam and air conditioning supply | 2.81% | 4.15% | 2.79% | 3.25% | 9.46 |
| 5 | Residential care activities | 1.85% | 4.48% | 2.43% | 2.92% | 9.32 |
| 6 | Security and investigation activities | 0.86% | 3.32% | 4.20% | 2.79% | 9.19 |
| 7 | Other professional, scientific and technical activities | 2.79% | 3.54% | 1.90% | 2.75% | 9.05 |
| 8 | Accommodation | 3.08% | 3.05% | 1.84% | 2.66% | 8.92 |
| 9 | Creative, arts and entertainment activities | 1.47% | 3.40% | 3.04% | 2.64% | 8.78 |
| 10 | Remediation activities and other waste management services. | 3.99% | -0.36% | 2.99% | 2.20% | 8.65 |
For the complete data of all sectors analysed, please click here.
With an exceptional overall growth score of 9.86/10, the human health sector – including clinics and medical practices – records a solid average net business growth rate of 4.78% between 2022 and 2024. The number of active businesses rose from 66,180 in 2022 to 73,815 in 2024, with growth peaking at 6.15% in 2023. This surge is likely fueled by rising demand for private healthcare services in the UK as patients face increasingly long NHS wait times.
Creative industries are booming with the motion picture, video and television production, sound recording and music publishing sector coming in second, averaging 4.24% growth over three years. Growth peaked at 5.12% in 2023, potentially benefitting from the global appetite for streaming content and UK cultural exports, which continue to attract international investment. Despite frequent speculation about and predictions about the risks the sector faces from artificial intelligence, the arts and creative industries continue to grow.
Real estate activities rank third with an average growth rate of 3.50%. Growth increased steadily from 2.87% in 2022 to 4.02% in 2024, with 5,275 new businesses added in 2024 alone. Entering 2026, the market remains buoyant despite economic uncertainty, with the number of homes listed for sale on Rightmove rising by 81% in the two weeks after Christmas, while asking prices jumped 2.8% month-on-month in January – the largest January increase on record.
The energy supply sector, encompassing electricity, gas, steam and air conditioning supply, recorded a 3.25% average growth rate, peaking at 4.15% in 2023. Green energy has become a top priority for UK households, with government initiatives like the Warm Homes Plan announced in January, aiming to provide £15 billion to fund solar panels and other energy-saving technologies to cut bills.
Residential care activities, including nursing homes and assisted living facilities, round off the top five fastest-growing sectors in the UK, posting an average net growth of 2.92%. Growth jumped significantly from 1.85% in 2022 to 4.48% in 2023, likely driven by rising demand from an ageing population.
Business hotspots revealed: Where in the UK is business performance the strongest?
| Rank | Area | Net Business Growth Rate 2022 | Net Business Growth Rate 2023 | Net Business Growth Rate 2024 | Avg Net Growth Rate (2022-2024) | Growth Score (/10) |
| 1 | Hackney | 3.13% | 3.84% | 3.34% | 3.44% | 9.97 |
| 2 | Islington | 1.20% | 4.79% | 4.28% | 3.42% | 9.95 |
| 3 | Camden | 1.64% | 3.91% | 3.89% | 3.15% | 9.92 |
| 4 | Torfaen | 3.46% | 9.64% | -4.17% | 2.98% | 9.9 |
| 5 | Derry City and Strabane | 1.52% | 0.54% | 5.19% | 2.42% | 9.87 |
| 6 | Barking and Dagenham | 1.74% | 0.70% | 4.70% | 2.38% | 9.85 |
| 7 | Stevenage | 1.90% | 2.00% | 3.12% | 2.34% | 9.82 |
| 8 | Westminster | 1.53% | 2.73% | 2.55% | 2.27% | 9.79 |
| 9 | City of London | 1.69% | 2.21% | 2.61% | 2.17% | 9.77 |
| 10 | Tower Hamlets | 0.05% | 2.23% | 4.16% | 2.15% | 9.74 |
With a strong average net growth rate of 3.44% between 2022 and 2024, Hackney beats over 300 locations across the UK to rank as the best area for business growth. Unlike many areas facing volatility, Hackney has delivered steady expansion year-on-year, with the number of active businesses increasing from 28,630 in 2022 to 29,340 in 2024.
Two other London boroughs complete the top three with Islington and Camden netting a notable 3.42% and 3.15% average growth rate, respectively. Islington saw particularly sharp acceleration, jumping from just 1.20% growth in 2022 to 4.28% in 2024, while Camden recorded a net gain of 1,590 new businesses in 2024.
Outside of London, Torfaen ranks fourth with an average growth rate of 2.98%. The Welsh borough experienced a dramatic spike in 2023 with growth soaring to 9.64% – the highest single-year increase among the top ten. Although growth dipped to -4.17% in 2024 as closures outpaced new openings, the overall three-year trend remains positive.
Robert Nay, Practice Group Leader at commercial law firm LegalVision, shared FOUR key tips for business owners to increase business resilience:
- Strengthen contracts to limit liability and protect cash flow
Solid legal foundations are essential for a resilient business. Ensure all contracts with clients, suppliers and partners are clear, up to date with changes in law, enforceable, and include provisions to limit liability (including liability caps and consequential loss exclusions) and to protect cash flow – such as defined payment terms, late fees, and exit clauses. Regularly reviewing and updating agreements also helps prevent disputes and ensures predictable revenue.
- Diversify revenue streams and client base
Relying heavily on a single client, sector or product line leaves a business vulnerable to sudden shocks. Expanding into new markets, offering complementary products or services and actively networking to build a broader client portfolio spreads risk, and shields a business during downturns.
- Plan for contingencies and stress-test your business
Regularly identify potential risks such as rising costs, supply chain disruptions and regulatory changes, and develop clear contingency plans. Also ensure your contracts have solid force majeure clauses to protect you against events outside of your reasonable control. By stress-testing your operations and finances against challenging scenarios, you can uncover weaknesses and refine strategies before real-world challenges arise.
- Pay attention to your competition
Keeping a close eye on competitors’ strategies, pricing and offerings is critical for staying ahead. Observe how your competitors adapt to market trends or respond to challenges, as this can provide valuable insights to inform your own business strategy and help maintain a competitive edge in a fast-moving market. Consider having price review mechanisms in your client contracts.
Study provided by LegalVision.