The Government is being urged to keep support measures in place for small businesses on the back of Covid-19 decimating company startup activity last year.
The number of company formations hit a four-year low in 2020, new figures from credit risk analyst CRIFVision-net show.
Despite a strong final quarter to the year, only 21,924 companies were established last year – down 4% on 2019 levels and marking the lowest number since 2016.
The company said the overall insolvency rate for 2020 was down by nearly 11% last year.
However, this was widely attributed to the prolonged closure of courts during the earlier waves of the pandemic.
The legal, accounting and business sector was the biggest contributor to startup activity in 2020, accounting for more than 4,400 registrations. However, this was still a 6% fall on the previous year.
“The focus must, therefore, remain on ensuring there are supports and measures in place to prevent current restrictions undoing the positive recovery seen in new business creation in the final quarter of 2020,” said CRIFVision-net managing director Christine Cullen.
“The impact of prolonged closures and restrictions on businesses has been well documented over the course of the pandemic, and while restrictions are important now, we must ensure that we are simultaneously developing a sustainable environment in which businesses can recover,” she said.
“From the early stages of the pandemic, the Government was quick to provide support for SMEs and new business start-ups, introducing a range of measures that have been consistently extended and adapted in line with Covid-19 developments. While these supports have played a vital role in facilitating early recovery, the concern is that the return to lockdown restrictions will reverse the progress made so far,” Ms Cullen said.