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 Judgments and Personal Insolvency data.