The biggest fall of 40 per cent was during the four weeks following lockdown on 23rd March, according to a new Economics Observatory report.
The figures are important because new businesses are the engine room of the economy, employing more young people whose job prospects have been worse hit by the virus.
The good news is that since May’s reopening, UK registrations have bounced back, with Economics Observatory suggesting just 7,100 fewer start-ups launching compared with 2019 – a fall in new business creation of 3.4 per cent.
Most badly affected sectors
Transportation and storage were the most badly affected sectors, with the number of new companies falling by over 50 per cent. Unsurprisingly, entrepreneurs didn’t think it was the best time to open a new restaurant either, as accommodation and food services registrations dropped over 40 per cent year on year.
The only business sector that saw an increase in new company registration was wholesale and retail trade, presumably as shops pivoted to selling local food produce as the nation hunkered down at home.
Which regions fared worse?
Wales saw the biggest drop-off in the number of new company launches, falling by nearly 40 per cent year on year. Northern Ireland and Scotland, the other two devolved regions, also suffered badly with over 30 per cent falls each.
Greater London was widely publicised as having a ghost-town status, this did not help when it came to entrepreneurs setting up, with the number of new company registrations dropping by 11 per cent.
“New business creation is a key part of any economy, notably for generating new job opportunities,” said the report authors. “The sharp decline in start-up activity in the UK during lockdown is likely to have a strongly negative impact on aggregate employment in the future, regardless of the shape of the recovery.”
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