Latest Bank of Ireland Barometer shows sharp decrease in Business Start ups

Bank of Ireland Business Banking today (13 January 2009) issued its latest Business Start-up Barometer that tracks the number of new businesses starting-ups in Ireland.

Key Findings:

• 21% decrease in new limited companies formed in 2008
• Decline in start-ups across all regions, with counties in the North West showing some of the biggest drops
• Only 2 counties showed an increase in start up activity in Q4, Longford, and Offaly
• 184 failed companies in Q4 – up 14% on Q3

Bank of Ireland Business Banking today (13 January 2009) issued its latest Business Start-up Barometer that tracks the number of new businesses starting-ups in Ireland.

The construction/real estate and finance/insurance sectors saw the greatest fall in new business activity in 2008, falling just under 42%. Excluding these sectors, overall activity fell by just under 12% year on year. The increase in business dissolutions in 2008 has been startling – with a 20% increase on 2007 figures – reflecting both the pace of the economic slowdown in the year and the level of activity in preceding years. However the quarterly percentage increase in dissolutions, showed a downward trend for Q4.

Dublin continues to record the highest number of new start-ups, registering 44% of the annual total. However this figure jumps to 55% when the neighbouring counties of Wicklow, Kildare, and Meath are included.

The number of failed companies has risen substantially year on year, with an annual total in 2008 of 587, compared with 281 in 2007, representing an increase of 109%. Although this may appear stark, it still only represents 4% of the annual new business start up figure.

Damian Young, Head of Small Business, Bank of Ireland Business Banking, commented: “The total 2008 start up figures comes as no surprise and largely ends the year as predicted at just fewer than 15,000 new business start-ups – a reduction of a little over 21% year on year. In comparison, 18,740 new limited companies were formed in 2007. 2008 has been a tough year for businesses, particularly in the final quarter of the year, where there was a 27% decrease in the number of start-ups, compared with the same quarter last year. The outlook for 2009 remains tough, but it is expected that overall start-up activity will remain at between 14,000 and 15,000 new companies being formed this year.

“There will be significant challenges in 2009 for small businesses, but it is imperative that viable businesses remain focussed in the months to come. Businesses must have a clear customer focus, be innovative in reaching its customers and maintain robust financial disciplines. We are committed to supporting the SME sector in clear recognition of its importance in building Ireland through this downturn. We have established a fund to help businesses and we urge them to meet with their individual banks to discuss the best way to structure their finances through the economic turmoil”, added Damian Young.

Year on Year Business Start Up Activity – and Q4 numbers

Ends

Contact:

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