CFE Business Startup Index shows UK startup activity is on the rise
The number of new startups launched in the UK last year increased by 4.5%, according to the Centre for Entrepreneurs’ (CfE) latest Business Startup Index. The figures have revealed an upsurge in business formation since 2014. The latest Companies House data, as analysed by CfE, shows that business formations reached a new record of 790,390 in 2022, growing 4.53% since 2021.
Almost 800,000 new businesses were registered in 2022 (up 4.5% on 2021). There was a surge of new companies during the Covid era in 2020, which was maintained in 2021 and 2022 as rapid changes in the economy led to new businesses being formed – a pattern also seen in other countries, including the US, France, and Singapore. 2022 was almost 16% up on 2019 and well above the pre-pandemic trend.
The National Pattern
Patterns have been consistent across the UK. Those doing well before Covid are still doing well and those with lower levels of activity are still lower. There has been a slight fall in new registrations in Northern Ireland. London still leads for new companies with formation three or four times higher than any other region of the country. A good deal of this comes from financial service companies and formation agents skewing the picture. But after accounting for that, there is also no question the capital remains the entrepreneurial engine of the UK.
Startup Activity Post-Covid
Covid saw some sectors develop rapidly, like new workwear providers, cleaning products and pharmaceutical providers. Many of these have trailed off. But the proliferation of cleaning services (2022 was approximately double 2019) suggests the UK is more conscious about hygiene and prepared to pay for it.
Consumer-focused businesses – selling computers, sports equipment, games, flowers, and more – surged in Covid and have stayed buoyant, reflecting an enhanced focus on leisure and lifestyle, perhaps helped by increased working from home.
In hospitality, there are signs that some changes were more short-term. New pubs were down 23% between 2019 and 2021 bounced back up 14% from 2021 to 2022.
Similar declines in new hotels, tour operators, and conference organisers have, thankfully, been reversed. Meanwhile, mobile food stands, UK camp sites, and holiday accommodation continue to grow after their surge in popularity.
Click here to download the full Business Startup Index.
