Business closures climb to record level while start-ups slump

01 12 2010 United Kingdom

The number of businesses which closed last year increased by 26 per cent, according to official figures published today by the Office for National Statistics.

The ONS report shows that in 2009 there were 236,000 business start-ups in the UK, compared with 267,000 in 2008. This represents an 11.7 per cent slump in the number of new businesses.

There were 279,000 business closures in 2009, compared with 221,000 businesses that closed in the previous year. This gives an increase in closures of 26.2 per cent, a record number since the current statistics began in 2000.

Not since 1995 have closures exceeded start-ups.

The highest number of start-ups occurred in the professional, scientific and technical categories with just under 48,000 new businesses. Not surprisingly, the construction industry suffered from the highest number of business closures (over 44,000), followed closely by the professional, scientific and technical sectors (over 42,000).

These figures illustrate that a high number of new businesses starting up in a particular sector is often linked to a high number forced to cease trading in the same sector.

The highest rate of start-ups occurred in business administration and support services, a sector which also saw the highest closure rate – nearly 15 per cent or one business in seven.

Within the regions London had the highest business start-up and closure rates at 12.6 per cent and 13.7 per cent respectively.

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