Contact: Neil Mulhern

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Publication Date: 28 January 2021

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1. Key Points


Trends in business births

  • There were 6,625 business births in Northern Ireland over the year to December 2019, which is an increase of 12.3% on the previous year. This amounts to a birth rate (proportion of active businesses) of 10.4%.

  • The business birth rate in Northern Ireland increased by 0.8 percentage points (pps) over the year, having fallen by 1.7 pps over the year ending 2018. This was the largest decrease in the birth rate since 2009.

Trends in business deaths

  • There were 5,765 business deaths over the year to December 2019, which is an increase of 31.6% on the previous year. This amounts to a death rate of 9.0%.

  • The business death rate in Northern Ireland increased by almost 2 pps from 7.1% in 2018 to 9.0% in 2019. This was the largest annual increase observed in business death rates since the recession brought the death rate up to 8.7% in 2009.


Figure 1: Birth and death rate for businesses registered in Northern Ireland, 2005 to 2019


Source: Inter-Departmental Business Register
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Geography

  • The number of business births was greater than or equal to the number of business deaths for all district council areas across Northern Ireland, except for Causeway Coast and Glens where 390 births and 395 deaths were recorded.

  • Birth rates increased for all district councils in Northern Ireland except for four areas. Causeway Coast and Glens, Mid and East Antrim, and Mid Ulster saw small decreases over the year while Derry City and Strabane saw a decrease of 1 pp. 

  • Death rates increased across all district council areas over the year to December 2019. Newry, Mourne and Down, and Belfast saw the largest increase in death rates, with an increase of 2.9 and 2.8 pps respectively over the year.


Figure 2: Count of births and deaths for businesses registered in Northern Ireland by District Council Area, 2019


Source: Inter-Departmental Business Register
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Industry

  • The number of business births continued to increase for Business administration and support services, and for the Transport and storage industry, which saw an increase of 109% and 211% respectively in the number of businesses over the five years since 2014. The strong growth rate in these industries is replicated across all UK regions as there has been a significant rise in small or single person courier companies, to meet the demand for home delivery services (Business Demography, UK: 2019).

  • The business death rate exceeded the birth rate for the following industries: Property, Finance and insurance, Retail, Motor trades, and Wholesale.


Figure 3: Birth and death rates for businesses registered in Northern Ireland by industry, 2019


Source: Inter-Departmental Business Register
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2. UK Comparison


Trends in UK business births and deaths

  • The general trend in birth rates for the four UK regions has been upwards since 2009 until 2018. Wales saw a small (0.3 pps) decrease over the year to 2019 while the other regions saw increases of less than 1 pp. 

  • Birth rates in Northern Ireland have historically been lower than the other three UK regions. The Northern Ireland birth rate reached a series high of 11.3% in 2017, while the series high for all UK regions was observed in 2016 when the birth rate in England was 15.0%.

  • Northern Ireland business death rates remain lower than England, Scotland and Wales. All four UK regions saw an increase in the business death rate from 2018 to 2019.


Figure 4: Business birth rates by UK region, 2009 to 2019


Source: Inter-Departmental Business Register
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Figure 5: Business death rates by UK region, 2009 to 2019


Source: Inter-Departmental Business Register
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3. High Growth Businesses


The Office for National Statistics (ONS) has been providing high growth business data for UK regions since 2014. This report includes high growth figures (see definition in Section 5) for Northern Ireland at district council area and industry level for the first time. The Northern Ireland data can be found here and they are comparable to the UK data published by the ONS, which can be accessed here.

  • There were 265 high growth business in Northern Ireland in 2019, a decrease of 55 businesses on the 2018 figure.

  • The high growth rate (high growth businesses as a proportion of all businesses with ten or more employees) for Northern Ireland (3.5%) is lower than that for England (4.5%), Wales (4.1%) and Scotland (3.9%). The Northern Ireland business profile is dominated by small businesses with less than 10 employees, which account for 89% of all businesses operating in Northern Ireland.

The Northern Ireland Department for the Economy (DfE) publishes an extensive annual report on High Growth Firms using data from the IDBR. There are definitional differences in the data presented in the DfE report and that presented here and, as such, they are not directly comparable. The data in the DfE report include agriculture and all businesses operating in Northern Ireland while the data presented in this report exclude agriculture and covers only those businesses registered in Northern Ireland. The data in this report are comparable with the ONS data for the four UK regions.


4. Employer Demography


The ONS has been providing employer demography figures for the UK since 2014. The employer business demography is an alternative measure of business demography based on businesses with at least one employee. It was set up to enable the collection of internationally comparable statistics. This report includes employer demography data for Northern Ireland at district council area and industry level for the first time. The Northern Ireland data can be found here.

  • The employer business birth rate for Northern Ireland in 2019 was 11.9%. This was a slight increase on the 2018 employer birth rate (11.6%).

  • The employer business death rate for Northern Ireland in 2019 was 8.8%, an increase of 0.7 pps on the 2018 figure of 8.1%.


5. Background Notes


Data Sources
The figures in these tables are produced using information from the Inter-Departmental Business Register (IDBR). The ONS produces business demography data for the UK. Northern Ireland level business demography are compiled by the Northern Ireland Statistics and Research Agency (NISRA) from data taken from the Northern Ireland element of the IDBR.

Coverage
The data used for this publication relates to businesses registered in Northern Ireland and exclude public sector organisations and the agricultural sector. Composite and managed services companies have also been excluded as the address does not represent the location of the activities of the business. All other businesses which are VAT registered and/or operating a PAYE scheme are included.

Definitions

  • Business
    In these data, the enterprise definition of a business is used: an enterprise is defined as the smallest number of legal units (based on VAT and PAYE records) which has a certain degree of autonomy in decision making. Each enterprise is assigned to a geographical location within the UK based on its registered (or main) address. This means that the Northern Ireland figures will not include businesses operating in Northern Ireland which have their main (or registered) UK address elsewhere in the UK.
    NISRA does, however, publish counts of businesses operating in Northern Ireland in the annual Facts and Figures from the IDBR. This publication includes all businesses operating in Northern Ireland including those in the agriculture sector and those headquartered elsewhere but operating from a site in Northern Ireland.

  • Active
    The starting point for demography is the concept of a population of active businesses in a reference year (t). These are defined as businesses that were registered on the IDBR by having a VAT and/or PAYE at any time during the reference year. Births and deaths are then identified by comparing active populations for different years. Birth and death rates are calculated by dividing the births and deaths by the active population for the same year. The ONS publishes active population figures for the UK on the NOMIS website.

  • Births
    A birth is identified as a business that was on the IDBR in year t, but was not on the IDBR in year t-1 or t-2. Births are identified by making comparison of annual active population files and identifying those present in the latest file, but not the two previous ones.

  • Deaths
    A death is defined as a business that was on the active file in year t, but was no longer present in the active file in t+1 and t+2. In order to provide an early estimate of deaths, an adjustment has been made to the latest two years deaths to allow for reactivations. The figures for these years are provisional and subject to revision.

  • Survival
    A business is deemed to have survived if having been a birth in year t or having survived to year t; it is active in terms of employment and/or turnover in any part of t+1.

  • High Growth
    High growth (for the purposes of this publication) measures businesses, who had at least 10 employees in 2016, that had an average growth in employment of greater than 20% per year between 2016 and 2019. The high growth rates are calculated by showing these businesses as a share of the 2019 active businesses with 10 or more employees. Businesses born in 2016 and agriculture businesses are not included.

  • Employers Demography
    Employer business demography is an alternative measure of business demography based on businesses with at least one employee. Employer business births include new businesses with at least one employee as well as existing non-employer businesses that have become employer businesses. Deaths are businesses that died with at least one employee, as well as businesses that cease to employ staff. It is important to note that these counts include single employee companies where the employee is also the owner-director.


6. Quality and Methodology


Further detail on the quality of these data and the methodology used to produce them can be found in the Quality and Methodology Report.