2022 was not a great year for new start-ups in Ireland. However, the last two months may indicate there’s reason for hope.
Irish start-ups hit a six-year low in 2022 after the number of new companies started last year dropped 16pc year-on-year.
Figures published today (30 January) by credit analyst CRIFVision-net show that there were 21,637 new company start-ups registered in 2022. This is the lowest the figure has been since the 21,018 recorded in 2016.
Accompanying this worrying statistic is that fact that annual insolvency figures are up 17pc compared to 2021. A total of 105 start-ups entered bankruptcy in 2022, marking a nearly 50pc year-on-year increase.
CRIFVision-net blames economic uncertainty brought about by rising inflation and a cost of living crisis for the latest trends in Ireland’s start-up scene.
“Start-ups faced a different economic environment in 2022. A combination of inflation, high interest rates, geopolitical uncertainties and energy insecurity led to an uncertain economic environment,” said Christine Cullen, managing director of CRIFVision-net.
While the first half of 2022 saw a high number of new company start-ups, with 11,167 registrations between January and June, July was the worst month for new registrations.
However, Cullen believes there’s reason for hope that things might be getting better.
“A bright spark, however, is that in spite of a 16pc decrease in start-ups in 2022, there was a consecutive increase month-to-month in the final two months of the year suggesting there are many businesses and entrepreneurs willing to invest in new ventures,” she said.
“This, coupled with recent Government budget surpluses and a net growth in exports, suggests an understated resilience in the Irish economy in 2023.”
Female directorships also went up slightly and accounted for more than 18pc of Irish start-ups in 2022.
Leitrim, Mayo and Laois emerged as the only three counties to record a percentage increase in the number of start-ups, while Dublin held on to the title of having the most start-ups.
The wholesale and retail trade sector recorded the biggest drop in new company start-ups, followed by manufacturing, fishing and computers. Extra-territorial organisations saw the largest bump, followed by agriculture, hotels and restaurants, and utilities.
“Decreases in traditionally strong performing sectors for the Irish economy like manufacturing and leasing suggest that this period of cost increases will likely remain a challenge for some time,” Cullen added.
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