A record-breaking number of new business formations in June offset a major drop in registrations during lockdown and suggests the beginning of an entrepreneurial recovery. These are some of the findings from analysis of Companies House data by the Centre for Entrepreneurs (CFE).
Business formations dropped year-on-year by 19% in March, 29% in April, and 3% in May, before growing 47% in June. All regions and devolved nations saw growth in June, with London and the West Midlands leading with 60% increases.
The devolved nations experienced the sharpest fall in formations during lockdown and the slowest recovery in June. Scotland and Northern Ireland are down nearly 20% year-on-year, while Wales is down 11%.
Despite these major drops, overall startup figures between March and June are down by only 3%. London emerged from lockdown with 6% more new businesses than the same period last year. Entrepreneurs around the UK using London-based company formation agents and virtual offices are likely to have contributed to this increase.
“June’s growth in business formations suggests that entrepreneurs’ confidence has returned and that many new ideas developed during lockdown are now being implemented” said Matt Smith, director of policy and research at CFE.
There is evidence of the emerging ‘covid economy’, with major increases in disinfecting services (+400%), manufacture (+243%) and retail (+317%) of medical goods, manufacture of workwear (+227%), wholesale of pharmaceuticals (+196%), manufacture of cleaning preparations (+178%), specialised cleaning services (+85%) and research on biotechnology (+69%).
Consumer businesses have also increased significantly, including 13,904 new internet retail businesses (+110%), as well as growth in sports retail (+89%), games and toys retail (+89%), computer retail (+99%), bakeries (+58%), and clothing retail (+53%).
“With many businesses set to close, and unemployment rising, it is entrepreneurs that will drive Britain’s much-needed economic recovery and create new jobs” said Oliver Pawle, chairman of CFE. “These figures provide reassurance that there is a ready supply of new ideas and growing sectors across the UK”.