New business start-ups in Ireland hit a six-year low

New company start-ups hit a six-year low last year as inflation and the cost-of-living crisis impacted appetites to start a new business.

Figures from CRIFVision-net show 21,637 new company start-ups in 2022, the lowest number on record since 2016 and a 16% drop compared to 2021. Business insolvencies were also up, increasing 17% on 2021. Last year also saw 105 firms enter bankruptcy, a 47% increase. The number of start-ups entering examinership was down 7% and those entering receivership also dropped by 9%.

Despite the overall decrease in activity among the start-up community last year, there were some signs of regrowth, with two consecutive months of increase recorded in November and December.

“Start-ups faced a different economic environment in 2022. A combination of inflation, high-interest rates, geopolitical uncertainties and energy insecurity led to an uncertain economic environment," Christine Cullen, Managing Director of CRIFVision-net said.

“Decreases in traditionally strong performing sectors for the Irish economy like manufacturing and leasing suggest that this period of cost increases will likely remain a challenge for some time.

“A bright spark, however, is that in spite of a 16% decrease in start-ups in 2022, there was a consecutive increase month-to-month in the final two months of the year suggesting there are many businesses and entrepreneurs willing to invest in new ventures.

The data shows female directorships accounted for 18.06% of start-ups in 2022, a 0.79% increase.