2020 set to be the best year on record for new business creation in the UK
SHL analysed data for 6,098,962 businesses created in the UK in the last decade, using Companies House data, to find how many new businesses have been created per year and which sectors have grown the most.
The results show that the number of new companies set up this year drastically surpass that of last year, suggesting tens of thousands of new entrepreneurs consider 2020 the best year on record for new business creation.
SHL’s research discovered that:
- An additional 59,358 new companies were created in the UK, between June and August compared to the same period in 2019.
- If the current rate of company growth continues, by the end of this year we will see an extra 84,758 companies created this year compared to 2019.
- Sectors experiencing the highest growth in new businesses include e-commerce (up 88%), clothing (up 55%) and retailers of medical goods (up 176%).
- Sectors experiencing the largest chilling effect on their growth include vets (down 48% YoY), aircraft repair/maintenance (down 44% YoY), opticians (down 33% YoY) and IT consultancy (down 25% YoY).
Business growth in the UK up a whopping 47% YoY
We’ve all witnessed the high number of jobs being lost and companies going bankrupt this year. With 1.3 million people on furlough from the end of March (rising to 9.6 million by August) and a historically difficult job market, people were busy creating their own opportunities. In June, when the furlough scheme had its first extension, new business creation started to boom.
At its peak, new business creation in the UK was up a whopping 47% year on year, with nearly 25k more new businesses being created in June 2020 than June 2019 and between June and August an additional 59,358 new companies were created, in the UK, compared to the same period in 2019.
If the current rate of company growth continues, by the end of this year we will see an extra 84,758 companies created this year compared to 2019. This is equivalent to a 12.31% increase year on year, which is the highest percentage growth since 2011 and the highest actual growth on record.
You can see the full breakdown month by month here.
Sector growth: e-commerce, clothing and retailers of medical goods surge amid the pandemic
Sectors experiencing some of the highest growth in new businesses include e-commerce (up 88%), clothing (up 55%) and retailers of medical goods (likely due to mask sellers) (up 176%). – it is probable that most of these sectors’ growth is strongly related to the pandemic and the lateral effects that came with it.
| Sector | 2019 | 2020 | Change |
| e-Commerce retail companies | 14,231 | 26,721 | 12,490 (up 88%) |
| Lettings agents | 22,700 | 26,286 | 2,586 (up 16%) |
| Clothing | 3,571 | 5,531 | 1,960 (up 55%) |
| Domestic construction companies | 9,536 | 11,299 | 1,763 (up 18%) |
| Hairdressers | 7,181 | 8,892 | 1,711 (up 24%) |
| Food Takeaways | 9,864 | 11,232 | 1,368 (up 14%) |
| Retail sale of medical and orthopaedic goods * | 239 | 660 | 421 (up 176%) |
| Pharmaceutical wholesalers | 372 | 784 | 412 (up 111%) |
| Manufacture of medical and dental instruments and supplies* | 202 | 504 | 302 (up 150%) |
| Bus and Coach operators | 65 | 280 | 215 (up 330%) |
| Disinfection and extermination companies | 73 | 235 | 162 (up 222%) |
| Manufacture of household and sanitary goods | 59 | 133 | 74 (up 125%) |
* These categories would include mask companies.
Sectors experiencing the largest chilling effect on their growth include vets (down 48% YoY), aircraft repair/maintenance (down 44% YoY), opticians (down 33% YoY) and IT consultancy (down 25% YoY).
| Sector | 2019 | 2020 | Change |
| IT Consultancy | 16,398 | 12,360 | -4,038 (down 25%) |
| Management Consultancy firms | 25,360 | 22,471 | -2,889 (down 11%) |
| Restaurants | 6,495 | 5,250 | -1,245 (down 19%) |
| Pubs and Bars | 4,746 | 3,866 | -880 (down 19%) |
| Accounting firms | 3,521 | 2,698 | -823 (down 23%) |
| Performing Arts | 2,446 | 2,052 | -394 (down 16%) |
| GPs | 1,847 | 1,504 | -343 (down 19%) |
| Human resources | 2,203 | 1,861 | -342 (down 16%) |
| Vets | 624 | 323 | -301 (down 48%) |
| Aircraft repair and maintenance | 565 | 317 | -248 (down 44%) |
| Hotels | 1,676 | 1,433 | -243 (down 15%) |
| Opticians | 180 | 121 | -59 (down 33%) |
Methodology
We analysed data for 6,098,962 businesses created in the UK in the last decade, using Companies House data. For each business, we looked at its incorporation date, registered address and sector. We used these details to find the growth in new businesses on a per year, per sector and geographic basis.
You can see more details about business growth per region and city and the datasheet here.and the project page project page: https://www.shl.com/en/blog/will-2020-be-the-best-year-ever-for-new-business-creation-in-the-uk/
