Despite the setbacks of 2020, it seems that it has been the best year for business creation on record for the UK.
Despite news that the economy has gone bust, it seems that 2020 may be the best year for business creation on record. 1.3 million people were on furlough from the end of March, a figure which reached 9.6 million by August. Yet, when the furlough scheme had its first extension in June, this is when new business creation really started to boom.
New research from SHL looked at 6,098,962 businesses created in the UK over the last decade. The research took into account the incorporation date, registered address and sector. From that, they looked at growth per year, sector and geographical location.
The Boom of New Companies
The research showed that an additional 59.358 new companies were created in the UK between June and August compared to the same period in 2019. There were nearly 25,000 more new businesses created in June 2020 than 2019. This meant that business growth in the UK was up by a staggering 47% year-on-year.
Sector by Sector Analysis
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%). The growth experienced by these sectors is hardly surprising given the year’s events and the surrounding effects of the pandemic.
However, the boom was not evident across all sectors. Vets, aircraft repair & maintenance, opticians and IT consultancy all experienced a year-on-year drop. This ranged from a 25% YoY drop (IT consultancy) to a 48% YoY drop (vets).
Unsurprisingly, restaurants, pubs and bars all experienced a drop, although maybe not as high as expected (19%). The performing arts, a sector recently under the microscope, has only experienced a 16% drop.
Predictions for Company Growth
Based on the current rate of company growth, by the end of 2020 there will be an extra 84,758 companies created this year compared to 2019. This is equivalent to a 12.31% year on year, the highest percentage growth since 2011 and the highest actual growth on record.