IRISH start-up figures are showing positive signs of Covid-19 recovery, according to latest figures from credit risk analyst CRIFVision-net.
The quarterly figures released today, reveal a 37% (+1,487) quarter on quarter increase in company start-ups for Q3 this year compared to Q2, when Ireland experienced a significant decline in new start-up registrations as a result of the Covid-19 pandemic.
In total, 5,482 new companies were registered in Q3, representing a three per cent year-on-year increase, compared to the same period in 2019.
Despite this increase, overall start-up figures for year to date are down 12% when compared to 2019, demonstrating the wider impact of the pandemic on the start-up community.
Sector insights: Q3 2020 vs Q3 2019 Legal, accounting and business was the biggest contributor to new company start-ups for Q3, accounting for a total of 990 new registrations. This, however, marks a 14% decrease for the sector when compared to the same time last year (1,149).
Wholesale and retail trade experienced the biggest growth in new start-ups in the third quarter of this year, with 682 new start-up registrations compared to 460 in 2019. This represents an increase of 48% on this time last year.
Agriculture grew by 37% (127 new companies), followed by education (+34%, 110 new companies) and fishing, which increased by 33% year-on-year (12 vs 9).
Regional overview: Q3 2020 vs Q3 2019 A total of 19 counties in the Republic of Ireland experienced a year-on-year improvement in new company registrations for Q3 this year.
Of those, Offaly experienced the largest increase in post-lockdown recovery presenting an increase of 45% in new registrations, compared to Q3 2019 (67 vs 37). Other counties which experienced significant growth include Laois (+37%, 65 vs 41), Carlow (+34%, 50 vs 33) and Wexford (+21%, 126 vs 99).
Dublin accounted for the largest number of new start-up companies in Q3 this year, recording a total of 2,539 registrations. This marks a 2% year-on-year decline for the county. Cork recorded a total of 501 new company start-ups (+2%), Limerick recorded 157 (-17%) and Galway saw an increase of 8% with a total of 215 registrations.
Insolvencies Overall insolvency levels for year to date are down compared to 2019 (419 vs 481).
However, there has been an increase in figures for Q3 in 2020, where insolvencies exceeded last year’s number by 17% (179 vs 153). This increase in insolvencies for Q3 can be widely attributed to the reopening of courts following a period of closure during the Covid-19 pandemic.
Commenting on the Q3 figures, Christine Cullen, Managing Director of CRIFVision-net, said:
“As Minister Donohoe outlined in his recent budgetary speech, the SME sector in Ireland has a crucial role to play in facilitating the recovery of the economy in a post COVID world.
“For this reason, it is particularly encouraging to see the start-up sector in Ireland begin to rebound following what a very difficult start to the year – where new company start-up registrations reached a five-year low.
“The growth in start-ups this quarter is a clear indication of the prospects and opportunities in an economy that is beginning to find its feet again. However, following the Government’s recent decision to move to Level 5 lockdown restrictions for a six-week period, many SMEs are now faced with further challenges and setbacks. As a result, maintaining an environment that provides supports and promotes growth for the sector needs to be the priority.
“To date, the Government have been very proactive in creating and implementing supports for the SME sector in particular. In our last quarterly review, we spoke about the measures that were introduced under the July Stimulus Package, which were of huge benefit to industry.
“Since then, these supports have been further enhanced through the additional funding and measures outlined in Budget 2021.
“However, the future threat of Covid-19 and what these additional Level 5 restrictions could mean for businesses across all levels still remains a real concern. In order to ensure that we create the most sustainable environment for businesses to survive and thrive, the focus needs to be on collaboration between Government and industry.
“The ever-changing landscape of Covid-19 will continue to be unpredictable and the key to mitigating damage in the coming months will rely on an agile and adaptable approach by businesses and Government.”