Published 3 October 2026 by Tarun Kumar, Founder and CEO, DataGardener. Data period 1 July to 30 September 2026, retrieved from the DataGardener company index on 3 October 2026. Companies House data is used under the Open Government Licence.
Key findings
- 192,499 new companies in Q3 2026, down 12.1% on Q3 2025 (218,984) and back to Q3 2024 levels (194,850). Formations have slowed every quarter of 2026: 207,272 in Q1, 196,493 in Q2, 192,499 in Q3.
- Software is the one clear growth story. Business and domestic software development was the activity with the largest absolute increase, up 44.8% from 5,913 to 8,564 formations, and information and communication was the only major sector to grow (+7.6%).
- A third of new companies now sit in the IS8 growth sectors. 62,549 Q3 formations fall in at least one of the Industrial Strategy's eight growth sectors, 33.8% of classified formations, up from 30.5% a year earlier. IS8 formations fell only 4.5% against the 12.1% overall decline.
- Real estate formations fell hardest among large sectors, down 25.3%, with buying and selling of own real estate down 36.9%.
- London's share keeps rising. London fell only 5.2%, against the 12.1% national decline, and now accounts for roughly 35% of new companies. Scotland was the most resilient nation or region (down 3.4%); Wales fell about 30%.
- Nine-month total: 596,264 formations in January to September 2026, down 7.7% on the same period of 2025 (645,905).
Formations by month
Q3 2025 now looks like the peak of the current formation cycle. Monthly volumes through 2026 have run consistently below their 2025 equivalents.
Formations by sector
Classified by each company's primary SIC 2007 code, grouped into sections. 96.0% of Q3 2026 formations carry a classification (98.1% for Q3 2025), so year-on-year falls are very slightly overstated and growth slightly understated.
| Sector (SIC 2007 section) | Q3 2026 | Q3 2025 | Change |
|---|
| Wholesale and retail trade | 37,257 | 46,099 | -19.2% |
| Information and communication | 21,272 | 19,769 | +7.6% |
| Professional, scientific and technical | 19,813 | 21,680 | -8.6% |
| Real estate | 17,794 | 23,814 | -25.3% |
| Construction | 15,145 | 16,770 | -9.7% |
| Accommodation and food service | 13,297 | 15,142 | -12.2% |
| Administrative and support services | 12,164 | 13,947 | -12.8% |
| Financial and insurance | 8,025 | 8,458 | -5.1% |
| Transportation and storage | 7,237 | 7,538 | -4.0% |
| Human health and social work | 7,073 | 8,384 | -15.6% |
| Other service activities | 6,621 | 8,996 | -26.4% |
| Manufacturing | 5,037 | 6,503 | -22.5% |
| Education | 4,602 | 5,252 | -12.4% |
| Arts, entertainment and recreation | 4,378 | 5,627 | -22.2% |
| Agriculture, forestry and fishing | 717 | 888 | -19.3% |
| Water and waste | 499 | 609 | -18.1% |
| Electricity and gas | 347 | 362 | -4.1% |
| Mining and quarrying | 130 | 184 | -29.3% |
| Other and unclassified activity codes | 3,410 | 4,896 | -30.4% |
The IS8 growth sectors
The UK Industrial Strategy names eight growth-driving sectors. Mapping each new company's primary SIC code to DataGardener's IS8 sector definitions, 62,549 Q3 2026 formations sit in at least one growth sector: 33.8% of classified formations, up from 30.5% in Q3 2025. A company can belong to more than one sector, so the rows below do not sum.
| IS8 growth sector | Q3 2026 | Q3 2025 | Change |
|---|
| Digital and Technologies | 24,869 | 23,427 | +6.2% |
| Creative Industries | 24,615 | 24,164 | +1.9% |
| Professional and Business Services | 26,353 | 29,156 | -9.6% |
| Financial Services | 8,025 | 8,458 | -5.1% |
| Clean Energy | 3,494 | 3,669 | -4.8% |
| Advanced Manufacturing | 984 | 1,334 | -26.2% |
| Life Sciences | 276 | 325 | -15.1% |
| Defence | 42 | 96 | -56.3% |
Digital and Technologies (+6.2%) and Creative Industries (+1.9%) were the only growth sectors to grow. Defence moves on a very small base (96 to 42), so its percentage should be read with caution. The foundation industries that support the eight (construction, materials, steel, ports, chemicals and electricity networks) recorded 15,365 formations, down 10.0%.
Formations by nation and region
Classified by trading-address region, covering 98.9% of Q3 2026 formations.
| Nation or region | Q3 2026 | Share | Q3 2025 | Change |
|---|
| London | 65,944 | 34.6% | 69,579 | -5.2% |
| South East | 20,125 | 10.6% | 22,273 | -9.6% |
| North West | 20,115 | 10.6% | 22,094 | -9.0% |
| East of England | 16,692 | 8.8% | 17,706 | -5.7% |
| West Midlands | 15,201 | 8.0% | 18,079 | -15.9% |
| Yorkshire and the Humber | 11,664 | 6.1% | 12,523 | -6.9% |
| Scotland | 9,914 | 5.2% | 10,268 | -3.4% |
| East Midlands | 9,469 | 5.0% | 10,414 | -9.1% |
| South West | 9,039 | 4.7% | 10,600 | -14.7% |
| Wales | 5,197 | 2.7% | 7,440 | -30.1% |
| North East | 4,745 | 2.5% | 5,155 | -8.0% |
| Northern Ireland | 2,243 | 1.2% | 2,836 | -20.9% |
The ten most common activities for new companies
| SIC code | Activity | Q3 2026 | Q3 2025 | Change |
|---|
| 47910 | Retail sale via mail order houses or via internet | 15,862 | 17,745 | -10.6% |
| 68209 | Other letting and operating of own or leased real estate | 8,591 | 10,787 | -20.4% |
| 62012 | Business and domestic software development | 8,564 | 5,913 | +44.8% |
| 70229 | Management consultancy activities other than financial management | 8,175 | 8,220 | -0.5% |
| 68100 | Buying and selling of own real estate | 6,480 | 10,263 | -36.9% |
| 64209 | Activities of other holding companies | 5,487 | 5,170 | +6.1% |
| 56103 | Take-away food shops and mobile food stands | 4,189 | 4,985 | -16.0% |
| 62020 | Information technology consultancy activities | 3,903 | 5,082 | -23.2% |
| 96020 | Hairdressing and other beauty treatment | 3,087 | 3,623 | -14.8% |
| 41202 | Construction of domestic buildings | 2,930 | 2,641 | +10.9% |
What we make of it
This section is interpretation, not finding. The pattern is consistent with a formation cycle that peaked in mid-2025 and is cooling broadly rather than collapsing: Q3 2026 is a weak quarter against an exceptional 2025, not against history. The composition shift is the more durable signal. Software development was the only large activity to add formations in absolute terms, and the growing IS8 share suggests that the slowdown is concentrated in property, retail and personal services rather than in the sectors the Industrial Strategy is trying to grow. Whether the software surge reflects AI-driven company creation cannot be read from registration data alone; it is a hypothesis the next edition can test against filing and survival behaviour.
Methodology
- Source. The DataGardener company index of the UK register (17M+ company records built from Companies House data), queried through DataGardener MCP on 3 October 2026. The full query log is kept with the report and available on request.
- Formation. A company whose registered incorporation date falls in the stated period and which is on the register index at retrieval, whatever its current status. Quarterly totals were re-verified with independent count queries.
- Sector. The company's primary SIC 2007 code, rolled up to sections, and to IS8 growth sectors using DataGardener's SIC-to-IS8 mapping. IS8 sectors overlap by design.
- Region. Trading-address region. Companies without one are shown in totals but not in the regional table.
- Counts, not estimates. Every figure is a count of register records; nothing is modelled or extrapolated.
Limitations
- Figures come from DataGardener's index of the register and are not official Companies House or ONS statistics; recently filed incorporations may still be processing, so recent months can revise slightly upwards.
- Sector classification coverage differs slightly between the two quarters (96.0% vs 98.1%), so sector falls are very slightly overstated and sector growth slightly understated; the direction of every change reported is robust to this.
- Company closures are excluded from this edition: dissolution dates in the index do not yet pass our completeness checks, and we publish nothing that does not.
- A registration is not a trading business; some formations are holding, dormant or special-purpose vehicles.
Cite as: DataGardener, UK Company Formations Report: Q3 2026, published 3 October 2026, datagardener.ai/research/uk-company-formations-q3-2026. Press and data enquiries: contact the team. The next edition covers Q4 2026.