Latest Bank of Ireland Barometer Indicates fall in entrepreneurial activity

Bank of Ireland Business Banking today (10 October 2008) issued its latest Business Start-up Barometer that tracks the number of new businesses starting in Ireland.

Key Findings:

• 17% decrease in new limited companies formed in Q3 from Q2 this year
• 3,391 new limited companies formed in Q3, 2008; 11,591 new companies formed to date this year
• Dublin remains the prime location for business start-ups
• Decline in start-ups across all regions, with Dublin suffering the biggest drop
• Decrease in the number of company failures recorded in Q3

Bank of Ireland Business Banking today (10 October 2008) issued its latest Business Start-up Barometer that tracks the number of new businesses starting in Ireland. As further evidence of the slowdown in the Irish economy, the Business Start-up Barometer shows a decrease in the number of new businesses established in the last quarter. 3,391 new businesses were established in Q3, a decrease of 17% from Q2 (4,081 companies). The number of companies established to date this year (11,591) is 20% lower than the number of companies formed in the same period last year (14,487).

The decline in the number of new start ups this quarter is noted across all sectors. Year to date, the construction and finance / real estate sectors have been worst hit, recording declines of 42% (from 2,267 at end of Q3 in 2007 to 1,322 at end of Q3 this year) and – 40% (from 2,488 at end of Q3 in 2007 to 1,491 at end of Q3 this year) respectively.

Whilst the fall off is nationwide, Dublin suffered the biggest drop, down from 5,815 new companies at the end of Q3 in 2007 to 5,042 at the end of Q3 this year. However, in percentage terms (13%) this is not as significant as other counties. Cork and Kildare showed significant reductions in the number of businesses established. In Cork, 1,116 new companies were registered at the end of Q3 this year, compared to 1,458 at the end of Q3 last year, a decrease of 23%. In Kildare, 477 companies were formed at the end of Q3 this year versus 640 at the end of Q3 last year, a 25% decrease.

On a more positive note, there has been an overall decrease in the number of company failures recorded this quarter. While still a significant number of companies failed in Q3 of this year (469 companies in total), this figure was 553 in Q2, a decrease of 16%. Not surprisingly, the highest number of failures was recorded in Dublin, where a total of 163 companies closed their doors. Yet this represents a decrease of 20% versus Q2 (204 companies).

The news is not so positive if we look at a year on year comparison. A total of 1,491 companies have failed to date this year (to the end of Q3), versus 1,183 to the end of Q3 in 2007 (a 26% increase). The Construction and Services sectors have been most impacted. In the Construction sector, 223 companies shut down at the end of Q3 this year, compared with 126 companies at the end of Q3 last year, an increase of 76%. In the Services sector, 167 companies were unsuccessful at the end of Q3 this year versus 102 companies at the end of Q3 last year, a 63% increase.

Damian Young, Head of Small Business, Bank of Ireland Business Banking said: “The figures released today show an expected fall in the number of business start-ups and the rise in business failures over the year. However, we continue to see good activity in the market and adjusting for the fall in construction related businesses, new business start-ups are in fact down less than 10%. “Businesses in the current environment must pay close attention to their cash flow and re-establish realistic projections for the next 12 months”, added Damian Young.

Top Locations for Business Start-Ups in Ireland this quarter

Top Locations for Business Failures in Ireland this quarter

Ends

Contact:
Anne Mathews,
Media Relations Manager,
Group Corporate Communications
Tel: 01 – 604 3836 or 087 246 0358