Business

Business start-up figures drop to four-year low during pandemic

The number of new company start-ups in Ireland fell to a four-year low in 2020 as the pandemic hit entrepreneurial activity.

The 21,924 start-ups registered last year was four per cent down on 2019 and the lowest figure since 2016 (21,018), according to figures from credit risk analysis company CRIFVision-net.

The 1,075 businesses registered in April, when Ireland was in the midst of the first Covid-19 lockdown, was the lowest monthly tally since December 2012.

While the start-up activity dropped in 2020 the fall was not as severe as the 2008 recession, when the number of new businesses registered fell by 22 per cent on 2007.

Activity also has been trending upward since June last year.

The final quarter of 2020 recorded an increase of 20 per cent in new registrations compared to the previous quarter.

The 6,583 companies registered between October and December represented a 23 per cent increase on the same quarter in 2019.

Insolvencies

The insolvency rate for 2020 was actually down almost 11 per cent compared to 2019, with 570 insolvencies for the year.

However, this decrease has been attributed to the prolonged closure of courts during pandemic.

Christine Cullen, managing director of CRIFVision-net, said: “Given the unpredictable nature of the Covid-19 pandemic, it is difficult to measure the full economic impact of restrictions and lockdowns.

“However, as we approach almost a full year since the first case of Covid-19 was confirmed in Ireland, there is a lot that we can learn in terms of trends and changes.

“According to our latest figures, 2020 was the lowest point for the number of new start-up companies in Ireland since 2016, with a noticeable decline in activity from the second quarter of the year.

“The correlation between this decline and the first Covid-19 lockdown is a clear indicator of the immediate impact that the national lockdown had on new business creation.

“From the early stages of the pandemic, the Government was quick to provide support for SMEs and new business start-ups, introducing a range of measures that have been consistently extended and adapted in line with Covid-19 developments.

“While these supports have played a vital role in facilitating early recovery, the concern now is that the return to lockdown restrictions will reverse the progress that has been made so far.

“The impact of prolonged closures and restrictions on businesses has been well documented over the course of the pandemic and, while restrictions are important now, we must ensure that we are simultaneously developing a sustainable environment in which businesses can recover.”

Source:

www.breakingnews.ie

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