Sheffield has suffered a fall in the total number of businesses in the city, placing it 127th out of 150 UK town and cities for growth.
The latest figures show 1,605 companies were created in 2012 but 1,800 closed - giving a net loss of 195 firms.
It means 3.5 businesses were lost per 10,000 people in the city, compared to a national average of 0.8.
Top of the table was London with 16.1 businesses created per 10,000 head of population, followed by Slough and Milton Keynes with 15.5 and 10.5 respectively. The top northern city was Manchester at 17th with 5.9 firms starting up in 2012 per 10,000 residents.
The Sheffield figures will put a dent in plans published by the Local Enterprise Partnership to create 70,000 new private sector jobs in the next 10 years.
John Wingfield, partner at UHY Hacker Young Sheffield, which produced the figures, said slow business generation was due to the recession still taking its toll.
“Bouncing back has been a challenge in Sheffield. A weak local economy and under investment have taken their toll on the area, meaning that businesses in Sheffield are still finding it difficult to take advantage of the broader economic recovery.
“However, there are signs that prospects could be starting to look up, with the Sheffield City Region’s Growth Deal, which secured almost £300m from the Government to support major investment in the city.”
James Newman, chair of the Local Enterprise Partnership, said business formation was a key priority.
He added: “Our target is to support the creation of 6,000 new businesses over the lifetime of the plan. We are particularly focused on new businesses in high value sectors – such as those created in world leading companies at the Advanced Manufacturing Park and on our Enterprise Zone.”