Numbers of business start-ups surge as Irish economy reopens

Almost every county in Ireland experienced growth in new company registrations during the first half of 2021, according to CRIFVision-net.

The first half of 2021 has seen a 42pc increase in new company registrations according to new data.

New figures from risk analyst firm CRIFVision-net reveal that has been a total of 13,955 new companies registered so far this year, marking a 42pc increase when compared to the first six months of 2020 [9,860 start-ups].

“Despite these early signs of recovery, many businesses are struggling and will continue to struggle for the foreseeable future, as evidenced by the increase in company insolvencies”

March was the strongest month for start-ups recording a total of 2,715 new registrations.

However, the second quarter of the year proved to be the busiest quarter, recording a 20pc growth in company registrations compared to Q1.

Rise of regional start-ups

25 of the 26 counties in the Republic of Ireland experienced a year-on-year improvement in new company registrations for the first half of this year.

Amongst these counties, Dublin accounted for the largest number of new start-ups, recording 6,631 new registrations (+44pc).

Cork (1,399) and Galway (552) experienced the largest growth of all the urban areas outside of the capital, with registrations representing a 45pc increase in each county, respectively. Furthermore, 202 new registrations in Limerick mark a 35pc increase in the county.

Sligo (+77pc), Westmeath (+61pc) and Monaghan (56pc) recorded the highest percentage growth.  

Mayo was the only county who experienced a decrease in registrations, with year-on-year new registrations in the county decreasing from 174 to 172 (-1pc).

Start-ups by sector

According to the CRIFVision-net data, the legal, accounting and business sector accounted for the largest portion of new start-ups in the first six months of the year, registering a total of 2,543 new companies, up 19pc when compared to 2020.

This is followed closely by wholesale and retail (2,233, +144pc), financial intermediation (2,038, +47pc) and construction (1,345, +37pc).

Despite ongoing restrictions on the hospitality sector, hotels and restaurants have also experienced an increase in start-ups, recording a total of 728 new start-ups (+47pc) in H1. This growth has been supported by Government supports and continued access to credit.

Community, Social and Personal services were the only industry that experienced a decline in growth, with only 942 new registrations this year (-13pc).

Rise in insolvencies not surprising

The impact of Covid-19 on companies across industries can easily be felt, with a total of 371 companies becoming insolvent during the first two quarters of this year, representing a 45pc increase on the same period last year.

According to the data, the most sector during this period was legal, accounting and business with a total of 63 insolvencies in the first half of the year (+75pc).

This was followed by financial intermediaries (46, +28pc) and construction with 39 insolvencies (22pc increase).

“While the ongoing Covid-19 pandemic provides incalculable challenges for many businesses across all sectors, the tenacity of the Irish entrepreneur is an encouraging force for economic recovery,” said Christine Cullen, managing director of CRIFVision-net.

“Strong growth in start-ups across most industries suggests that the Irish business community has identified a new wave of entrepreneurial opportunities during lockdown and are pursuing their development, a marker of businesses’ positive expectations for the future.

“However, despite these early signs of recovery, many businesses are struggling and will continue to struggle for the foreseeable future, as evidenced by the increase in company insolvencies. These insolvencies are likely to increase, particularly in hospitality sector, as government supports are rolled back and credit lines dry-up.

“Therefore, every support should be given to protect new companies and ensure their growth and development. Time and time again, Irish SMEs have proven to be an invaluable source of employment and revenue for the Irish economy; continuous dialogue between industry and policymakers is now needed to continue growth into the future,” said Cullen.

By John Kennedy (john.kennedy3@boi.com)

Published: 19 July 2021