Number of new firms set up hits four year low in 2020
The Covid-19 pandemic had a big impact on company formations last year, with the number of new firms established in 2020 hitting a four year low.
In total 21,924 new businesses were registered over the 12 months.
In comparison to 2019, this represents a fall of 4%, the data from CRIFVision-net shows.
“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,” said Christine Cullen, Managing Director of CRIFVision-net.
However, despite the disappointing number of new ventures, the numbers show a level of resilience higher than that seen in the collapse in the economy that accompanied the financial crisis in 2008.
The decrease was almost nationwide, with 24 counties recording a drop across the year.
Just Mayo and Tipperary saw year-on-year increases, with Leitrim, Meath and Clare among the counties with the largest drop in new firms registered compared to 2019.
The first half of the year was extremely difficult for those in business, with the second quarter seeing just 3,998 new start-ups registered.
April was particularly poor, with the lowest number of new registrations recorded since December 2012.
The fishing sector saw the biggest decrease in new start-ups, followed by leasing, utilities and hospitality.
However, the strongest sectors for growth were legal, accounting and business, with 4,401 new registrations.
But optimism appears to have grown in the second part of the year, with new company registrations rising 23% year on year in the fourth quarter.
Remarkably, given the level of pressure on businesses, the number of firms that became insolvent over the year was down 10.7% when compared to a year earlier, at 570.
However, the prolonged closure of the courts system is thought to have played a role in this result.
The month with the largest number of insolvencies was February.
“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,” said Ms Cullen.
“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.”