Ireland’s new company start-up levels reached their lowest point in four years in 2020 due to the Covid-19 pandemic, with 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.
According to the data from credit risk analyst CRIFVision-net, 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).
Only 2 counties record increase
Tipperary (+6% 461) and Mayo (+4% 345) were the only two counties to record a percentage increase in start-ups, while Leitrim experienced the largest percentage decrease of company start-ups, recording a total of 55 new companies in 2020, down 41% when compared to 2019.
The legal, accounting, and business sector was the biggest contributor to new company start-ups in 2020, accounting for 4,401 registrations – a 6% decrease for the sector when compared to 2019.
The fishing sector (-42%, 28) recorded the biggest drop in new company start-ups in 2020, followed by leasing (-39%, 411), utilities (-17%, 151), and hospitality (-14%, 1,111).
Insolvencies
The overall insolvency rate for 2020 was down 10.7% compared to 2019, totalling 570 insolvencies for the year.
This decrease in levels can be widely attributed to the prolonged closure of courts during the Covid-19 pandemic.
Within this period, the largest numbers of insolvencies were recorded in the month of February (76); this was an increase of 69% compared to February 2019. April proved to be the least insolvent month (19), down 55% on 2019.
The most insolvent sector during the first half of the year was wholesale, retail and trade (90), down 12% on 2019. Wholesale was followed by legal, accounting and business (79, – 29%), hotels and restaurants (74, +1%), and construction (62, -15%).
