More businesses were created in Islington last year, new figures show.
By Will Grimond, Data Reporter
More businesses were created in Islington last year, new figures show.
However, the UK has seen its business birth rate fall to its lowest level since 2010, with the Institute of Directors blaming a poor economic environment and skills shortages.
According to figures from the Office for National Statistics, around 4,125 new businesses opened in Islington in 2023, up from 3,665 a year earlier.
Meanwhile, 2,950 businesses closed in the area last year, down from 3,360 in 2022.
This means the total number of businesses in Islington increased last year.
Across the UK, the rate of new businesses opening hit its lowest level since 2010, at 11% of all active businesses.
Despite this, the death rate – the proportion of active businesses which closed last year – also fell to 10.8%.
As a result, business openings overtook closures. This was a reversal from 2022, which was the first year in more than a decade when there were more deaths than births.
Anna Leach, chief economist at the Institute of Directors, blamed poor financial conditions after the pandemic, a “relatively weak” growth environment and skill shortages.
“Recent budget decisions unfortunately undermine the UK’s business environment, disincentivising employment and reducing investment through the impact of higher taxes on business costs,” she added.
“Meanwhile, higher public spending is expected to raise the cost of finance in the UK.”
“If the government wants to get higher growth, it’ll need a vibrant business sector to deliver it.”
However, the figures did show an increase in the number of ‘high-growth’ businesses, those which saw their workforce swell by more than 20% for three years in a row.
There were about 13,750 such businesses nationally in 2023, an increase from 11,480 a year earlier. London had 3,305 high-growth businesses, comprising 6.3% of companies in the area.
Pranesh Narayanan, research fellow at the IPPR, welcomed the recovery in the number of high-growth businesses, leading to more jobs in dynamic and growing companies and a stronger economy overall.
However, Mr Narayanan warned they will be competing with larger, established firms.
He urged the Government to ensure the Competition and Markets Authority has the backing it needs to stop larger businesses from “throwing their weight around to stifle competition”.
Looking at individual industries, the transport and storage sector industry had both the highest business birth rate (14.5%) and the highest death rate (21.6%).
At the other end of the scale, finance and insurance saw the lowest proportion of new businesses (6.4%) while the health sector had the best survival rate, with just 6.5% of firms going under.
