Published: November 27, 2023 8:04 am
Author: RT
New company openings have also been in decline, official statistics show
A record number of businesses closed across the UK last year, according to a new report by the Office for National Statistics (ONS) released this week.
ONS data shows that the number of so-called ‘business deaths’ increased from 328,000 to 345,000 between 2021 and 2022. That led to an increase in the ‘death rate,’ or the percentage of active businesses that closed, from 11.2% to 11.8% over the two years. This figure surpassed the ‘birth rate’ of new businesses being founded in 2022 for the first time since 2010.
According to the report, 345,000 businesses across the UK closed in 2022, marking a 5% increase on the 328,000 that shut their doors in the previous year, and the highest figure since records began in 2002.
Overall, 337,000 new businesses were launched in Britain nationwide in 2022, down from 364,000 the year before.
ONS data indicated that transport and storage businesses struggled the most. The sector had the highest ‘death rate’ at 23.8%, almost double any other industry. Information and communication businesses came in second at 13.6%, while accommodation and food services, and retail industries had the joint-third highest failure rate at 12.8%.
On the positive side, information and communication also had a higher percentage of high-growth businesses than any other industry. An enterprise is characterized as ‘high-growth’ when its average annualized growth exceeds 20% per year over a three-year period. Growth can be measured by the number of employees or by turnover.
READ MORE: Multi-billion UK industry might be dead by 2030 – Times
The ONS data is a “potential warning sign for the British economy with more companies going out of business than started up for the first time in 2022 since the tail end of the financial crisis,” George Dibb, head of the Institute for Public Policy Research’s Centre for Economic Justice, was quoted as saying by Yahoo Finance.
“Whilst this isn’t unexpected – high energy costs combined with the end of pandemic support schemes would always see a rise in company closures – it might signify that greater business support would have maintained higher economic activity,” said Dibb.
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