The first quarter of 2021 saw a significant increase in “necessity-led entrepreneurship” across the retail and wholesale sectors, the latest figures from credit risk analyst CRIFVision-Net show.
Today’s figures reveal an 88% year-on-year increase in retail trade and wholesale start-ups.
CRIFVision-Net said this suggested that the continued Covid-19 public health restrictions and resulting job losses may have compelled more individuals to start their own businesses in response to the last 12 months of adversity.
A total of 6,353 new company start-ups were registered in the first three months of the year, marking an 8% increase compared to the same time last year.
During this period, company insolvencies were also up by 7% on last year, CRIFVision-Net said.
Other sectors seeing double-digit year-on-year start-up growth include manufacturing (87%), motoring (41%), transport, storage and communications (33%) and health and social work (11%).
Real estate (+9%), finance (+8%) and IT (+8%) also demonstrated year on year growth, CRIFVision-Net added.
But today’s data also suggests the hospitality and construction sectors continue to feel the impact of Government Covid-19 restrictions.
The hospitality sector saw a 13% decrease in company start-ups in the first quarter of 2021 compared to 2020.
Meanwhile, construction recorded a 6% decrease in start-ups and reported a 25% increase in insolvencies during the same time.
Christine Cullen, Managing Director of CRIFVision-net, said that a year on from the first Covid lockdown the Irish economy continues to demonstrate its resilience, despite the ongoing public health restrictions and uncertainty.
“Overall, an 8% growth in new company start-ups suggests an underlying confidence in the fundamentals of the Irish economy and last week’s Department of Finance forecast of a 4.5% growth in GDP this year, and a 5% rise next year, further supports this,” Christine Cullen said.
But she said that industries such as the hospitality and construction sectors continue to bear the brunt of the Covid-19 public health restrictions.
“However, recent economic and operational challenges in other sectors, combined with a ‘nothing to lose’ mentality may have given rise to a new wave of necessity-led entrepreneurship,” she added.
She said this was particularly evident in relation to the retail trade and wholesaling industries who have experienced a notable increase in company start-ups over the last three months, despite being subject to ongoing restrictions.
“Despite the continued economic adversity felt across many sectors, the fundamentals of the Irish economy remain strong and business owners appear quietly confident of strong growth in 2021,” Ms Cullen stated.