The number of company start-ups decreased by 12% year-on-year in the first three months of 2022, according to our latest @CRIFVision-net quarterly data.
The figures suggest that economic tailwinds like supply chain vulnerabilities exposed by the pandemic, combined with cost-of-living inflation, may be impacting individuals wishing to begin their own venture.
Urban hubs such as Dublin, Cork, Galway, and Limerick all recorded declining numbers in company start-ups, but rural counties such as Leitrim, Longford, Laois, and Wexford saw an increase.
There was a 19% increase in the number of companies dissolved compared to the same period last year (Q1 2022 vs Q1 2021). Growth was seen in some sectors weakened through Covid-19 public health restrictions, with hotels and restaurants rebounding by 14% and construction by 5% during the period.
A rise of 26% in the number of green start-ups in areas like recycling, solar and wind energy was seen during the period in the utilities sector, fueled by the drive to meet sustainability targets.
It is encouraging to see hotels and restaurants (+14%) and construction- (+5%) have both rebounded following Government Covid restrictions, while the electricity, gas and water supply sector (+26%) has also made significant gains.
Despite Dublin (2,389 registrations) accounting for the largest number of new start-ups nationwide, the number was still a 17% YoY decrease. Cork saw a total of 602 new start-ups (-5%), Galway recorded 206 (-18%), and Limerick recorded 185 (-3%).
Clearly, the cost-of-living crisis is hitting the country amid the fallout from the pandemic. The price of energy was rising even before we consider the latest supply chain challenges caused by war in Ukraine. The decrease in new company start-ups suggests an underlying hesitancy in the domestic and global economies.
But there appear to be some other factors at play that give reason for cautious optimism, including the growth in start-ups in more rural counties. Equally, some of the uncertainty is offset by the rebound in the hospitality and construction sectors, two of the industries that suffered most due to the pandemic health restrictions.
Some might assume that people would not have the disposable income to spend on holidays and socializing, but double digit growth in hospitality suggests optimism in the sector and a strong outlook despite all the economic tailwinds.