Despite economic gloom more than 800,000 new firms were created this year
More than 800,000 new firms were created this year despite economic turmoil and grim prospects for the immediate future.
Online shopping was a key driver for the 98,000 new retailers which popped up in wake of the pandemic, as Covid unleashed a wave of entrepreneurialism.
Figures from private equity firm Growthdeck show 808,000 new businesses came into existence in the UK, slightly down on 836,000 from 2020/21, which was a record.
The spike in new firms comes despite soaring inflation, rising interest rates and poor prospects for economic stability in the near future.
Growthdeck said the sector that had the most new firms created was retail, driven by online sales, with the pandemic having “supercharged” the trend.
Recruitment had one of the biggest rises in new businesses as the jobs market continues to move quickly over the past two years. There was a reported 11 per cent rise in firms in the sector, up to more than 8,900.
It also said government schemes such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) game fledgling firms capital.
“Despite the economic uncertainty hanging over the country, the number of small businesses that have been created is a sign of longer-term optimism”, Ian Zant-Boer, CEO of Growthdeck, said.
Throwing caution to the wind however, he said impending economic problems means
“we’re likely to see the number of startups start to fall in the coming months.”
Saying “the last recession triggered a wave of new startups”, he added that new firms “can grow strongly out of a recession so long as funding is in place to help them thrive.”