Figures released by business information company CRIF Vision-Net show that the entrepreneurship spirit continues to flourish in Ireland despite Brexit uncertainty.
An average of 71 companies were set up every day within the first three months of 2019 against an average insolvency rate of two per day.
Within the first quarter of 2019, a total of 6,413 companies were formed in Ireland. These are the best figures of Q1 in the last 13 years and a 14% increase on the previous record-breaking Q1 of 2018.
The biggest contributors to these figures were professional firms, which accounted for 1,448 new start-ups in the first three months of the year, a 22% increase from the same period last year. Social and professional services recorded an impressive 50% growth (949 new firms) over the same period in 2018.
However, the financial sector, which is the third largest sector, decreased by 1% to record 708 new start-ups as compared to 715 in Q1 of 2018 while the construction industry showed a modest 1% growth.
Releasing the figures, Christine Cullen, Managing Director of CRIF Vision-Net, said that “the buoyant entrepreneurial spirit in Ireland continues to weather the continued uncertainty across the water.” Cullen further commented that “the first quarter of 2019 has been the best in 13 years for start-ups in Ireland,” and that “industries including professional services and social and personal services saw significant growth.” Meanwhile, much-discussed sectors such as construction and finance have again shown strong growth numbers.
Ms. Cullen also observed that, other than the concerns over a slowdown in the global economy, Brexit remains the greatest challenge of 2019. It now sits at the top of all business agendas, in both big and small companies. And the concern is particularly acute for many of the companies that are susceptible to supply chain disruptions, costly tariffs and border checks on the horizon.
Therefore, it seems businesses are doing everything they need to do to prepare themselves for the unknown and the potentially messy post-Brexit period. Cullen pointed out that, “in the meantime, it is critical that the Irish Government continue to provide assistance to safeguard the economy from the worst effects of a No-Deal Brexit.”
Twelve counties made double-digit growth rates in the total number of start-ups in Quarter One, with Dublin recording the highest number of start-ups among all the counties. There were 3,089 start-ups established in the capital within the first quarter of the new year, which is close to half of all the start-ups in the entire country within the period.
Cork recorded the second highest number of start-ups with 690 new businesses being established in Q1 of 2019 – a 13% increase over the same period in 2018. Galway came in a distant third with 236 new start-ups – a 1.2% drop while Limerick was fourth with 210 new start-ups which was a 7.7% improvement on Q1 of 2018.
It is also worth noting that this growth in start-ups wasn’t confined to the counties with the highest urban populations. Louth recorded a 21% increase while Donegal had a 16.5% increase in the number of companies formed. Kerry was up by 7%, Wicklow was up by 14%, and Wexford saw a 38% increase in new company start-ups.
However, data from business and credit risk analyst CRIF Vision-net also shows that the rate of insolvencies in 2019 has remained relatively low as compared to the previous year. There was an almost 26% year-on-year drop in insolvencies in 2018 versus 2017. Quarter One of 2019 recorded 192 insolvencies as compared to 186 in the same period for 2018.
The wholesale and retail sectors were the most insolvent, with a total of 31 recorded insolvencies, which is a 34.8% increase on the Q1 figures for 2018. The professional services sector also had the same figures, 31 insolvencies, which was a 10.7% increase in the while the construction sector recorded 25 insolvencies – a 13.8% reduction.
Dublin was, unsurprisingly, the most insolvent county followed by Galway and Cork. Clare, Waterford, Carlow Mayo, Westmeath, Tipperary, Laois, and Kilkenny all recorded less than five insolvencies each in Q1 of 2019 as compared to Q1 of 2018.
Sara Constatini, CRIF’s Regional Director for the UK and Ireland, pointed out that the continued growth in the number of Irish start-ups in Q1 is very encouraging. She indicated that international data shows that Ireland is on course to outperform even some of Europe’s biggest economies, such as Germany, in 2019.
However, while the domestic economy is thriving, external challenges continue to cause several concerns. Other European economies are also feeling the cloud of uncertainty and the next couple of weeks will be crucial in determining the European market confidence in 2019 and beyond.