The first nine months of the year have seen a 28 percent increase in new company start-ups across Ireland, versus this time 12 months ago, according to new data published by credit risk analyst CRIFVision-Net.
“The quarter three figures suggest that the growth in start-ups was disproportionately concentrated in the first six months of the year, which saw a 42% increase in start-ups year-on-year. In contrast, quarter three recorded a more modest growth of four percent, versus quarter three 2020. The data also reveals a 24% decrease in insolvencies in the year to date and a 48% decrease in quarter three 2021, versus this time last year,” CRIFVision-Net stated.
Sectoral analysis
“Amongst the top performing sectors in quarter three were leasing (+60% ), utilities (+33% ), manufacturing (+31% ) and finance (+31% ). Other sectors to see double-digit growth include wholesale and retail (+18% ), transport and storage (+17% ) and real estate (+16% ).
“Amongst some of the sectors most impacted by Covid-19, construction saw a modest four percent increase in start-ups. Meanwhile the hotel and restaurant sector experienced a four percent decrease in start-ups.
“The hotel and restaurant sector saw a 76% decrease in quarter three insolvencies (33 in quarter three 2020 vs 8 in quarter three 2021 ). Construction also recorded a decrease in insolvencies, falling 13% YoY (16 in quarter three 2020 vs 14 in quarter three 2021 ).”
Regional analysis
“A total of 10 counties in the Republic of Ireland experienced a year-on-year improvement in new company registrations for Q3 this year. This growth was typically found in counties with large urban populations, including Dublin (+7% ), Cork (+7% ), Waterford(+20% ), Sligo (+19% ) and Kilkenny (+4% ). The other counties to record quarterly growth include Mayo (+13% ), Clare (+11% ), Carlow (+7% ), Kerry (+6% ) and Wexford (+5% ). Limerick (-4% ) and Galway (-5% ) both recorded a decrease in new start-ups.”
At-risk sectors
“Unsurprisingly, the hotel and restaurant sector continues to be the most at risk sector, with approximately three in five companies (63% ) in this space being categorised as ‘high-risk’. This represents a five percent increase on quarter three 2020. However, this figure still compares favourably to this time five years ago, when 66% of companies in the sector were categorised as ‘high risk’.
“Other sectors to feature prominently in the high-risk category include computers (59% ), construction (58% ), transport and storage (54% ) and wholesale and retail (54% ).”
Commenting on the quarter three figures, Christine Cullen, Managing Director of CRIFVision-net, said: “12 months ago, economic commentators and financial institutions were predicting an economic bounce in the second half of 2021.
“A 28% growth in new start-ups certainly supports this narrative, however, it is interesting to note that this bounce in new start-ups was largely concentrated in the first half of the year, as opposed to the third quarter of the calendar year. This slowdown in start-up growth perhaps reflects a more stable operating environment and a return to business as usual for many industries.
“That said, the hospitality and construction sectors continue to try to navigate their way out of the short- and long-term impacts of Covid restrictions. While a year-on-year decrease in insolvencies across the two sectors is at face value certainly encouraging, possibly more telling again is the high number of businesses in these sectors currently classified as high-risk.
“In recent weeks, we have seen positive Central Bank of Ireland growth projections and a largely well received Budget 2022. It is therefore important that we build on this positive market sentiment and critically, that we continue to look for ways to support the most at-risk sectors to bridge out of recent Covid challenges and give them the confidence and infrastructural support to move to a growth mindset as we approach the year end.”
