There was a 37 per cent jump in the number of company start-ups in the third quarter as the Irish economy rebounded from the initial wave of the Covid-19 pandemic and associated lockdown, according to figures from credit risk analyst CRIF Vision-net.
The figures also point to a significant increase in insolvencies, however, as the country’s courts reopened.
The group’s quarterly business start-up data is often viewed as a indicator of the underlying strength of the economy here.
In total, 5,482 new companies were registered between July and September, 1,487 more than in the second quarter when Ireland experienced a significant decline in new start-up registrations as a result of Covid-19.
The quarterly number was also marginally up on last year.
“The growth in start-ups this quarter is a clear indication of the prospects and opportunities in an economy that is beginning to find its feet again,” Christine Cullen, CRIF Vision-net’s managing director, said.
“However, following the Government’s recent decision to move to Level 5 lockdown restrictions for a six-week period, many SMEs are now faced with further challenges and setbacks,” she said.
The figures showed legal, accounting and business was the biggest contributor to new company start-ups, accounting for a total of 990 new registrations. This, however, marks a 14 per cent decrease for the sector when compared to the same time last year (1,149).
Wholesale and retail trade experienced the biggest growth in new start-ups in the third quarter of this year, with 682 new registrations compared to 460 in 2019. This represents an increase of 48 per cent on this time last year.
While overall insolvency levels for the year to date are down compared to 2019, the third quarter figures show insolvencies exceeded last year’s number by 17 per cent (179 versus 153).
CRIF Vision-net attributed the increase to the reopening of courts following a period of closure during lockdown.
“As Minister Donohoe outlined in his recent budgetary speech, the SME sector in Ireland has a crucial role to play in facilitating the recovery of the economy in a post Covid world,” Ms Cullen said.
“For this reason, it is particularly encouraging to see the start-up sector in Ireland begin to rebound following what a very difficult start to the year – where new company start-up registrations reached a five-year low,” she added.