Irish start-ups hit six-year low, as new annual figures reveal impact of inflation and cost-of-living crisis on Irish economy

Ireland’s new company start-up levels reached their lowest point in six years in 2022 due to economic uncertainty brought by rising inflation and a cost-of-living crisis, according to our latest CRIFVision-net end of year figures.

The annual figures released today reveal that a total of 21,637 new start-ups were registered in 2022, the lowest figure on record since 2016 (21,018). The 2022 figure also marks an overall decrease of 16% in new registrations when compared to 2021.??

According to our data, the first half of the year recorded the highest number of new company start-ups (11,167, January – June). July was the worst month for new registrations (1,573) in 2022, while May was the best month for start-ups (1,978).?

Despite the overall decrease in activity among the start-up community in 2022, there were some signs of regrowth, with two consecutive months of increase recorded in November and December.??

Insolvencies in focus

Insolvency figures for 2022 were up 17% YoY and a total of 105 start-ups entered bankruptcy in 2022, a 47% YoY increase. While the number of start-ups entering examinership was down 7% and those entering receivership also dropped by 9%.?

Female directorships

Female directorships accounted for 18.% of start-ups in 2022, a 0.79% increase YoY. While male directorships of start-ups in Ireland saw a modest increase, up to 41% compared to 40% a 2021.?

Regional overview 2022 vs 2021?

Of the 26 counties in ROI, a total of 23 recorded a decrease in new company start-ups for 2022.?Sligo experienced the largest percentage decrease, recording a total of 161 new companies in 2022, down 23% when compared to 2021. It was followed by Louth (-22%), Dublin (-20%) and Donegal (-16%).?

Leitrim (+23%, 122), Mayo (+8%, 357) and Laois (+6%, 271) were the only counties to record a percentage increase.??

Sectoral overview 2022 vs 2021?

In 2022 the majority of industries experienced a similar decline in start-up activity. The wholesale and retail trade sector (-43%, 2,096) recorded the biggest drop in new company start-ups in 2022. This was followed by manufacturing (-30%, 561), fishing (-27%, 24) and computers (-24%, 1,117).??

What does this tell us?

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.?

According to our latest figures, 2022 was the lowest point for the number of new start-up companies in Ireland since 2016, with a noticeable decline in year-on-year activity compared to 2021.???

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.?

This, coupled with recent Government budget surpluses and a net growth in exports, suggests an understated resilience in the Irish economy in 2023.

To learn more, contact https://www.vision-net.ie/Company-Info/Crif-Visionnet-Limited-177790

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