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Business closures at lowest rate since 2008

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The number of business starting operations increased by 1.2% from 346,000 to 351,000 between 2013 and 2014.

Latest figures from the Office for National Statistics show that the growth rate for new businesses decreased from 14.1% to 13.7% in 2013/14.

The number of businesses that ceased trading also declined with closures decreased from 9.7% to 9.6% in 2013/14 – the lowest fall rate since 2008.

Further findings show:

London was the region with the highest growth rate (17.7%) and fall rate (10.6%)

business administration and support services had the highest growth rate at 2.7%, whilst accommodation and food services had the highest fall rate at 13.1%.

The ONS attributes the rise of business start-ups were due to a strengthening of the labour market with an employment rate rise from 70.1% in September 2011 to 73.2% at the end of 2014.

John Allan, national chairman for the Federation of Small Businesses, said:

“In recent years, business births have seen unprecedented levels as more people see self-employment and starting out in business as a rewarding career choice.

“Coupled with the gradual gains in business survival rates, assisted by the improving economic outlook and a range of helpful policy measures, this has led to more than 5.4 million businesses in the UK”

Jimmy McLoughlin, deputy head of policy at the Institute of Directors, commented:

“Skills and finance will play a vital role in unlocking potential growth. Entrepreneurs need to be able to hire the very best from around the world and they need the right kinds of equity finance to encourage risk-taking.”

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