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Irish company start-ups drop 12% year-on-year in first quarter

Written by Robert McHugh, on 23rd May 2022. Posted in Ireland

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The number of company start-ups decreased by 12% year-on-year in the first three months of 2022, part of a national trend seen across 16 counties, according to the latest figures from credit risk analyst CRIFVision-net. 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.

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, fuelled by the drive to meet sustainability targets.

Sectors that saw year-on-year start-up growth include electricity, water and gas supply (26%), hospitality (14%), education (7%), and construction (5%). The quarterly data suggests the hotels and restaurants (+14%) and construction- (+5%) sectors have rebounded following Government Covid restrictions, while the electricity, gas and water supply sector (+26%) has also made significant gains in the first quarter.

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).

A total of 16 counties in the Republic of Ireland experienced a year-on-year decline in new company registrations in the first quarter 2022. Although Dublin accounted for the largest number of new start-ups nationwide in the first quarter, recording a total of 2,389 registrations, the number was still a 17% year-on-year decrease.  Cork saw a total of 602 new start-ups (-5%), Galway recorded 206 (-18%), and Limerick recorded 185 (-3%). Ten counties in the Republic of Ireland experienced a year-on-year increase in new company registrations.  Among these counties, Leitrim (+42%), Longford (+35%), and Laois (+21%) recorded the highest percentage growth. 

Commenting on the research, Managing Director of CRIFVision-net, Christine Cullen said, "The cost-of-living crisis is hitting the country with increased food, fuel, and electricity bills 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. We’re seeing much of that uncertainty reflected in the figures for this quarter. A 12% decrease in new company start-ups suggests an underlying hesitancy in the domestic and global economies."

She added, "What growth in more rural locations may suggest is a shift in terms of the public’s expectations for different lifestyle choices seen through a gradual move away from the traditional big cities. This could be a result of a shift to hybrid working and a hybrid working environment, as well as the housing shortage and high property and rent prices in Ireland’s urban centres."

Source: www.businessworld.ie

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