Business Barometer

Irish Start-ups Hit Four-Year Low But Q4 2020 Sees Promising Recovery.

Ireland's new company start-up levels reached their lowest point in four years in 2020 due to the Covid-19 pandemic, according to the latest figures from the CRIFVision-net Annual Review.

The annual figures reveal that a total of 21,924 new start-ups were registered in 2020, the lowest figure on record since 2016 (21,018). This marks an overall decrease of 4% in new registrations when compared to 2019. The figure also represents the first time in 7 years company start-ups experienced a decrease compared to the previous year.

According to the data, the second quarter of the year recorded the lowest number of company start-ups (3,998, April-June). April 2020 was the worst month for start-ups (1,075) since December 2012 (992).

Despite the overall decrease in activity among the start-up community in 2020, there have been early signs of regrowth, with levels increasing from June (1,701).

The final quarter of the year proved particularly strong, marking an increase of 20% in new registrations compared to Q3. In total, 6,583 new companies were registered in Q4, a 23% increase on the same period in 2019.

The figures reveal that despite the Covid-19 economic downturn, start-ups have remained more resilient when compared to the 2008 recession where figures decreased by 22% year-on-year for 2008 (18,696 start-ups, 2007 vs 14,603 start-ups, 2008).

Regional overview: 2020 vs 2019

Of the 26 counties in the Republic of Ireland, a total of 24 recorded a decrease in new company start-ups for 2020:

  • Leitrim experienced the largest percentage decrease, recording a total of 55 new companies in 2020, down 41% when compared to 2019.
  • Leitrim was followed by Meath (-39%, 629), Clare (-33%, 401), and Cavan (-24%, 213).
  • Mayo (+4%, 345) and Tipperary (+6%, 461) were the only two counties to record a percentage increase.
  • Dublin was the most popular location for company start-ups (10,089). Cork, Galway, Kildare and Meath make up the remainder of the Top 5.
  • Cork in second place had 2,000 start-ups, down 8% compared to 2019 (2,176). Galway, Kildare and Meath accounted for 2,170 company start-ups between them.

Sectoral overview: 2020 vs 2019

In 2020, the majority of industries experienced a similar decline in start-up activity:

  • The fishing sector (-42%, 28) recorded the biggest drop in new company start-ups in 2020.
  • Fishing was followed by leasing (-39%, 411), utilities (-17%, 151), and hospitality (-14%, 1,111).
  • The legal, accounting, and business sector was the biggest contributor to new company start-ups in 2020, accounting for 4,401 registrations. This, however, marks a 6% decrease for the sector when compared to 2019.

The most popular industry was professional services (Legal, Accounting & Business) which accounted for 4,401 of all company start-ups, down 6% on the previous year. The finance sector was the second most popular industry for start-ups in 2020. 3,322 new companies were set-up, up 8% on 2019 (3,322 vs 3,088) - one of only two industries to see a substantial growth in start-ups compared with 2019. The only other industry which saw a growth of more than 200 new companies was Wholesale & Retail (+326).

Company start-up figures will be released in full next week when CRIFVision-net's Annual End of Year Review is published, along with Insolvency, Director, Business Start-up, Bad Debt Judgements and Personal Insolvency data.

To receive your copy of the Annual Review straight to your inbox, submit your email here.

  By Business Barometer.

Issue 435 (Week Ending 28/01/2021)

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