New business start-ups at highest level for 20 years
17 03 2008 United Kingdom
A record 471,500 new businesses started trading in 2007, the highest annual number recorded since at least 1988, according to the latest Barclays enterprise survey.
An estimated 498,000 businesses closed in the same period.
Barclays latest survey shows an increase of three per cent on the number of start-ups in 2006 – when an estimated 457,200 new firms opened bank accounts in England and Wales.
The report shows strong increases in the North East (11 per cent) and West Midlands (11 per cent), while Yorkshire had a fall of one per cent.
The continuing boom in construction produced a 20 per cent increase in new businesses in that sector. Production and wholesale suffered the greatest year on year decline in start-up activity.
Increase in business closures
Seven million businesses have started in England and Wales over the last twenty years and a similar number have closed, the report shows. This follows a familiar pattern, where start-ups win business from more established firms.
The closure rate has averaged 14 per cent but rose to 17 per cent in 2007, when an estimated 498,000 businesses closed. The high closure rate resulted in a net loss of 22,000 businesses.
The closure rate was at its peak in the 1991-92 recession, reaching 18 per cent in 1992. It dropped as low as 11 per cent in 2003 with the strengthening UK economy.
Less than one in ten of the businesses that started up at the beginning of 1988 were still trading at the end of 2007, according to the Barclays report.
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