The number of business starting operations increased by 1.2% from 346,000 to 351,000 between 2013 and 2014.
Latest figures from the Office for National Statistics show that the growth rate for new businesses decreased from 14.1% to 13.7% in 2013/14.
The number of businesses that ceased trading also declined with closures decreased from 9.7% to 9.6% in 2013/14 – the lowest fall rate since 2008.
Further findings show:
London was the region with the highest growth rate (17.7%) and fall rate (10.6%)
business administration and support services had the highest growth rate at 2.7%, whilst accommodation and food services had the highest fall rate at 13.1%.
The ONS attributes the rise of business start-ups were due to a strengthening of the labour market with an employment rate rise from 70.1% in September 2011 to 73.2% at the end of 2014.
Nigel Holland from Holland & Co Chartered Accountants said:
“There has, over the last few years, been a very large number of new start ups. We have noticed the increase in numbers of new businesses at my firm.
This is good news for the economy however the additional good news for the economy is that many of these new businesses are managing to survive. In the past there has been a large number of businesses which have closed down shortly after setting up which is very unfortunate for the owners and also bad for the economy. There are now more than 5.4 million businesses in the UK.
To ensure that there is continued economic growth I believe that there needs to be the right kind of equity finance available to provide working capital for this growth coupled with a skilled workforce which will enable the new businesses increase productivity.
Planning and forecasting by the business owners is also a key factor.”
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