The number of new start-ups recorded in the first six months of the year fell by 20 per cent compared with 2021, as the cost of living crisis causes uncertainty for businesses already reeling from the pandemic.
The latest figures from credit risk analyst CRIFVision-net show the number of companies dissolved was also higher, up 56 per cent.
Only January saw an increase in start-ups year on year, followed by five months of contraction. Decreases in the number of new companies established were seen in retail, which saw start-ups decline by 51 per cent, motors and manufacturing. The latter two declined by a third and 31 per cent respectively. Computers, agriculture and construction also fell significantly, along with hospitality and real estate.
“The cost-of-living crisis was evidenced in the first half of this year. The impact of war in Ukraine, how that has impacted higher energy bills and combined with cost-of-living increases, influenced by the post-pandemic supply chain problems, is firmly translating into the business marketplace,” said Christine Cullen, managing director of CRIFVision-net.
For flax sake: why is the idea of a new flag for Northern Ireland so controversial?
The secret loves of property writers: Our top 10 favourite homes of 2024
No work phone? Companies that tell staff to bring their own could be walking into danger
Sally Rooney: When are we going to have the courage to stop the climate crisis?
“The year started off strongly with a rise in the number of new company start-ups in January, but that dipped in February and took a big tumble in March, which may also be due in part to that uncertainty created by the war in Ukraine starting at that period.”
In terms of geographical differences, only Leitrim, Laois, Longford, Cavan and Mayo recorded start-up growth. The largest decrease was recorded in Offaly, at 32 per cent, with Kerry and Sligo at 30 per cent and 28 per cent.
Dublin accounted for the largest number of new start-ups nationwide at 4,612, but still saw a decline of 25 per cent year on year, while Cork saw a decline of 20 per cent to 1,084.
“Some bright sparks in the data are seen in the growth picture outside of the main urban centres of Dublin, Cork, Galway and Limerick. Although these four cities accounted for the highest numbers of start-ups in H1 this year, figures were still down on H1 of last year. But growth was steady in Leitrim, Laois, Longford, Cavan and Mayo, suggesting an attraction for rural locations where costs may be more reasonable and housing may be more affordable,” said Ms Cullen.
“In spite of the 20 per cent decrease in start-ups during the same period last year, there was nonetheless a considerable number of companies still created each month suggesting there are many businesses and entrepreneurs willing to invest in new ventures even though there is a challenging economic backdrop.”
