Start-up activity drops 12% amid rising costs
5,600 new companies were registered in Ireland in the first three months of the year, down 12% on the same time last year.
New data from CRIF Vision-net suggests that some people are holding off on launching new businesses due to rising costs, and supply chain problems.
“What we are seeing is a bit of legacy from the pandemic and also the cost of living crisis is hitting companies,” said Christine Cullen, Managing Director of CRIF Vision-net.
Speaking on Morning Ireland, she said today’s figures reflect the global and domestic hesitancy we are seeing in the economy.
The figures show that the number of new companies registered dropped in 16 counties, while ten counties recorded a rise.
Urban areas such as Dublin, Cork, Galway, and Limerick all registered a drop in new company registrations.
Rural counties such as Leitrim, Longford, Laois, and Wexford saw an increase.
“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,” Ms Cullen said.
“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,” she added.
Although Dublin accounted for the largest number of new start-ups nationwide in the first quarter, with 2,389 registrations, the number was still down 17% on the same time last year.
Cork saw a total of 602 new start-ups, down 5%, Galway recorded 206, down 18%, and Limerick recorded 185, down 3%.
Of the ten counties that saw a jump in registrations, Leitrim saw the biggest rise up 42%, Longford up 35%, and Laois up 21%.
The data shows a rise in start-up activity in some industries that were hardest hit during the Covid-19 pandemic.
New companies in the hotel and restaurant sector increased by 14%, while new businesses in the construction sector increased by 5%.
Meanwhile, there was a 26% jump in the number of green start-ups in areas like recycling, solar and wind energy.
Ms Cullen said the retail and wholesale sectors are struggling most at the moment, with start-up activity down 43%.
The figures also reveal that 2,545 companies were dissolved in the first quarter of this year, up 19% on the same time last year.
“Insolvencies, in terms of going down the traditional insolvency route have seen a 34% decrease, but we are seeing an increase in the number of companies that are dissolved – which is speaking to trends of people closing the doors and walking away from their companies,” Ms Cullen explained.