2024 saw a surge in new business startups with the number of new limited company startups, sole traders, and partnerships rising 5.5% to 23,384.
Data from CRIF Vision Net based on company accounts shows 2024 recorded the second-highest number of new companies in over a decade, following only 2021, which saw a surge of startups following a pandemic backlog.
According to the figures, the majority of industries experienced an increase in startup activity last year including motors up 20%, real estate up 18% and transport, storage and communication up 17%.
However, the business support sector was the standout performer with financial services, accounting and administration services accounting for one in five startups, with 4,876 companies formed last year.
Analysis by CRIF said strong performance in this sector could account for Ireland’s robust business ecosystem, with the abundance of business and financial support businesses providing expertise for startups to draw upon.
CRIF Vision Net MD Christine Cullen: ‘With a 5.5% increase in company formations compared to 2023, 2024 recorded the second-highest number of new companies in over a decade, underscoring the entrepreneurial spirit driving the economy.’
The construction sector also saw robust activity with 2,392 startups representing a 3% increase, highlighting the continued demand for housing and infrastructure projects. Retail and wholesale recorded 2,302 startups, up 7% on the previous year.
The number of startups in agriculture fell 18%, electricity, gas and water supply were down 15%, leasing was down 6% and hospitality fell 2%.
CRIF Vision Net managing director Christine Cullen said:
“Robust startup activity in 2024 demonstrates that Ireland remains an attractive place to do business.”
With a 5.5% increase in company formations compared to 2023, 2024 recorded the second-highest number of new companies in over a decade, underscoring the entrepreneurial spirit driving the economy.
Overall, the insolvency rate tracked by CRIF was up 25% compared to 2023, totalling 838 insolvencies for the year.
Those included companies within the SCARP rescue process. The largest number of insolvencies were recorded in the month of December, with a total of 114 an increase of 43 compared to December of 2023.
Small businesses and startups have been vulnerable to the increased input costs seen by most businesses in recent years. Despite inflation coming down below 2%, 2024 was marked by a number of high-profile business closures. Ms Cullen said:
The incoming government’s priority should be to introduce supports to ensure that the strong momentum in startups is maintained, to ensure we retain our position as a dynamic and resilient hub for domestic and international business operations.
CRIF said that on a geographic basis, 16 counties recorded an increase in startups compared to the previous year, while eight counties saw a decrease.
Dublin once again was a major hub for startups in the country with 10,680. Dublin, alongside Kildare, collectively accounted for nearly half of all startups, underscoring their role as pivotal hubs for emerging businesses.
Cork contributed significantly with 2,268 startups, accounting for one in every 10 startups.
Following November’s election, a new Programme for Government was published last week by Fianna Fáil and Fine Gael with the support of independents. The programme sets out plans to bring forward measures to support SMEs, in particular, the retail and hospitality sectors and this would entail changes to VAT, PRSI and other measures.
The new Government also pledges to set up a Cost of Business Advisory Forum that will review all business taxes and costs and ensure businesses are consulted before new legislation or policies are introduced that impact small businesses.