Start-up registrations hit a 5-year low in H1 2020

Ireland has recorded the lowest number of start-up company registrations since 2015.

Start-up company registrations reached the lowest level in five years in the first half of 2020 with a total of 9,853 business formations recorded.

This is the lowest number on record since the same period five years ago when 8,981 were registered.

“The full brunt of the pandemic was particularly evident in the month of April when numbers dropped to the lowest in eight years”

According to the latest figures from credit risk analyst CRIF Vision-net, between February and May there was a 30pc decline in start-ups compared with the same period in 2019.

April was the worst month for start-ups with 1,075 registered since December 2012 when 991 were registered.

The decline was felt across all 26 counties in the Republic of Ireland with the worst decline noted in Westmeath with 38pc and 99 start-ups followed by Louth down 36pc to 218, Sligo down 35pc to 57, Waterford down 33pc to 140 and Cavan down 33pc to 107.

The only county in the Republic of Ireland to record a year-on-year increase in start-up figures was Tipperary, with 256 established between January and June, up 4pc.

Insolvencies down due to court closures

Ireland’s overall insolvency rate for the first half of 2020 was down 27pc compared with the same time in 2019, with a total of 240 insolvencies for the six months from January to June.

This can be attributed to the closure of the courts during the Covid-19 lockdown and the current Government stimulus packages keeping firms afloat.

The largest number of insolvencies were recorded in February with 72 insolvencies, up 60pc compared with February 2019.

However, April saw the smallest number of insolvencies at 12, down 71pc compared with 2019.

A significant rise in insolvencies is expected for the second half of 2020 with courts resuming their activities post-lockdown.

“Our figures clearly show how the Covid-19 pandemic has taken its toll on company formation and the broader Irish economy,” said Christine Cullen, managing director of CRIF Vision-net.

“In January, Ireland looked to be in extremely good economic health: for the first time ever, company start-up registrations exceeded 2,200 in a single month, which suggested some positive trends for the year ahead.”

“However, Covid-19 led to an early dip in this figure, with levels starting to drop off as early as February. The full brunt of the pandemic was particularly evident in the month of April when numbers dropped to the lowest in eight years.”

Written by John Kennedy (john.kennedy3@boi.com)

Published: 18 August, 2020