Number of new businesses close to record high
According to the latest figures published by the Office for National Statistics (ONS), the rate at which new firms are emerging is at close to a record high.
ONS data shows that 28.5 per cent more businesses were created in 2013 compared to the year before, bringing the total to 346,000. The measure of new companies as a proportion of all the UK’s firms stood at 14.1 per cent in 2013, which was the highest since ONS began recording the data in 2004.
Current businesses could be contributing to the creation of new companies
The fact that business administration and support services saw the highest business birth rate suggests that demand may well be coming from existing firms. This would indicate that the effects of business growth are fuelling more economic activity.
This would fit with recent figures showing that hiring and salaries are both improving in the business and professional sectors, partially driven by the City of London. The capital’s economic success can also be seen in its business birth rate, which was far higher than anywhere else in the country.
The time is ripe to become an entrepreneur
Now is a good time to be setting up a business in Britain: now that the downward trend caused by the financial crisis has been reversed, more people are taking the decision to step out on their own.
At the same time, the number of businesses to cease trading has slipped by six per cent, meaning 238,000 closed across the period. This suggests signs of consolidation within the finance sector, as finance and insurance saw the highest business death rates – though most of the data recently published points towards the significant and growing contribution these sectors make to the economy as a whole.