Business growth in the UK up a whopping 47%
We’ve all witnessed the high number of jobs being lost and companies going bankrupt this year. With 1.3 million people on furlough from the end of March (rising to 9.6 million by August) and a historically difficult job market, people were busy creating their own opportunities. In June, when the furlough scheme had its first extension, new business creation started to boom.
At its peak, new business creation in the UK was up a whopping 47% year on year, with nearly 25k more new businesses being created in June 2020 than June 2019 and between June and August an additional 59,358 new companies were created, in the UK, compared to the same period in 2019.
If the current rate of company growth continues, by the end of this year we will see an extra 84,758 companies created this year compared to 2019. This is equivalent to a 12.31% increase year on year, which is the highest percentage growth since 2011 and the highest actual growth on record.
New business by region
this boost in company creation is not evenly spread across the country. By far the biggest growth has been in Greater London, where new business creation is up 19.16% year-on-year, in second place in Yorkshire and the Humber with 9.44% growth YoY and in third is the North East with 4.5% YoY growth. Yet, outside England the story is not as rosy with devolved regions seeing reductions; Northern Ireland is down 7.63%, Scotland is down 6.05% and Wales is down 5.93%.
Sector growth: E-commerce, Clothing and Retailers of Medical Goods surge amid the pandemic
Sectors experiencing some of the highest growth in new businesses include e-commerce (up 88%), clothing (up 55%) and retailers of medical goods (likely due to mask sellers) (up 176%). – it is probable that most of these sectors’ growth is strongly related to the pandemic and the lateral effects that came with it.
Sectors experiencing the largest chilling effect on their growth include vets (down 48% YoY), aircraft repair/maintenance (down 44% YoY), opticians (down 33% YoY) and IT consultancy (down 25% YoY).
Methodology
We analysed data for 6,098,962 businesses created in the UK in the last decade, using Companies House data. For each business, we looked at its incorporation date, registered address and sector. We used these details to find the growth in new businesses on a per year, per sector and geographic basis.
