• 1,890 agricultural businesses closed vs 805 new businesses created in Q1 2025
• Across the UK just 2.64 employees for every firm opening down from 3.5 in 2017
• £27.4 billion blow to UK economy in Q1 2025 from closing businesses

Less than half of agricultural businesses shutting their doors are being replaced by new entrants, according to new research from Cynergy Bank.

The Bank's latest Business Births and Deaths Index, released today, draws on ONS data for January to March this year to paint a grim picture for the UK's agricultural sector. In the first quarter, just 805 new agricultural businesses were created, compared to 1,890 closures, highlighting a worsening trend for the industry even before the impact of April's National Insurance rise and impending inheritance tax changes.

Cynergy Bank's Business Health Score*, which measures the ratio of new businesses created to those lost give Agriculture a score of just 0.43, meaning for every two businesses that close, fewer than one is being created to take its place. This is a record low** for the industry and lower than any UK sector, underscoring the growing challenges faced by farmers and rural enterprises.

The sector's struggles stand in stark contrast to industries such as real estate, education, finance, and health and social care, all of which managed to create more new businesses than were lost in the same period. By comparison, the average across all sectors remains above parity, with property-related businesses posting a robust score of 1.43.

Shrinking start-ups

Cynergy Bank's research also shows a broader trend of shrinking start-ups across the UK. The number of employees for every new business opening in the UK has fallen to a record low** in the first quarter of 2025, when the average number of staff was 2.64 per new firm, compared with 3.5 in 2017.

The number of jobs created through new business formation barely outpaced job losses from closures in the first three months of the year, with a net gain of only 4,334. This figure pales in comparison to 110,242 during the same period in 2017.

Wider economic impact

The data also shows that at £329,000, the average turnover of firms shutting their doors reached its highest level since records began**, with the total turnover of businesses closing or moving overseas*** hitting £27.4 billion in the first quarter, £5.1 billion more than this time last year.

While traditionally the contribution from new businesses outpaced losses from those closing, this trend is also slowing. Over the past 12 months, the total turnover of shutting firms was £92.7 billion. This exceeded the £90.4 billion contribution from start-ups over the same period.

Nick Fahy, CEO of Cynergy Bank, said: "With less than half of closing agricultural businesses being replaced, farmers are grappling with rising costs, labour shortages, and the looming spectre of inheritance tax changes. 

 "It is concerning to see new businesses employing fewer and fewer staff, and the turnover of closing or relocating firms at an all-time high.

 "Despite these sobering statistics, I strongly believe that the entrepreneurial spirit of the UK remains intact.

 "It's crucial that we strive to keep this spirit alive. At Cynergy Bank, we remain committed to supporting businesses of all sizes with tailored financial solutions and expert guidance."