A National Statistics Publication
Published by: Economic and Labour Market Statistics Branch,
Northern Ireland Statistics and Research Agency

Contact: Neil Mulhern
Email:
Publication Date: 26 January 2023

Theme: Business and Energy
Coverage: Northern Ireland
Frequency: Annual


DOWNLOAD TABLES

1. Key Points


There were approximately 65,000 active, registered businesses in Northern Ireland during 2021. These businesses accounted for just over 2% of the total active, registered UK business population, estimated to be 2.9 million for the same period.

This report provides an analysis of business registrations (births), de-registrations (deaths) and survivals of active businesses registered in Northern Ireland. The data presented in this report and accompanying tables are for the year ending December 2021.

Business births and deaths data are subject to revision, therefore, figures presented in this publication differ from those published in previous reports in this series.

Trends in business births

  • There were 6,655 business births in Northern Ireland over the year to December 2021, which is an increase of 17.4% on the previous year. This amounts to a birth rate (proportion of active businesses) of 10.3%.

  • The business birth rate in Northern Ireland saw an increase of 1.2 percentage points (pps) over the year and is at the highest level since 2017.

Trends in business deaths

  • There were 5,200 business deaths during the year to December 2021, which is an increase of 24.6% on the previous year. This amounts to a death rate of 8.0%.

  • The business death rate in Northern Ireland saw an increase of 1.3 pps over the year and is 1.1 pps below the series high in 2012. This was the largest annual increase observed in business death rates since 2009.


Figure 1: Birth and death rates have increased over the year for businesses registered in Northern Ireland.

Birth and death rate for businesses registered in Northern Ireland, 2005 to 2021

Note: Improvements have been made to the birth and death rate methodologies for all data from 2016 onwards. Please see Section 7: Quality and Methodology for further details.


Geography

  • The number of business births was greater than the number of deaths for all district council areas across Northern Ireland, except for Antrim and Newtownabbey. Belfast had the highest number of births and deaths (1,435 births and 1,115 deaths), while Mid and East Antrim, and Antrim and Newtownabbey had the lowest number of births (385). Fermanagh and Omagh had the lowest number of deaths (305).

  • Birth rates increased for all district councils in Northern Ireland except for Antrim and Newtownabbey, which saw a decrease of 2.0 pps over the year to 9.9%.

  • Death rates increased across all district council areas over the year to December 2021. Mid Ulster continued to have the lowest death rate (5.7%) across the region for the seventh consecutive year. It is likely that the Coronavirus (COVID-19) pandemic contributed towards higher business death rates in 2021.


Figure 2: The number of business births was greater than the number of deaths for all district council areas across Northern Ireland in 2021, except Antrim and Newtownabbey.

Number of births and deaths for businesses registered in Northern Ireland by District Council Area, 2021


Industry

  • The Transport and storage (including postal) industry saw the highest number of births (1,000) and birth rate (24.4%) in 2021, and the largest increase in the number of births over the year (335 or 50.4%). The birth rate for the Business administration industry remained relatively high at 12.4% despite the number of births decreasing by 235 (35.1%) over the year to December 2021.

  • The Accommodation and food services sector saw strong growth in business births with the birth rate increasing by 3.4 pps to 12.9% following a decline of 2.6 pps the previous year. This may have resulted from an increase in demand following the easing of restrictions imposed during the Coronavirus (COVID-19) pandemic in 2020.

  • Construction also saw an increase in births over the year, but the birth rate for Construction (9.5%) remains 2.8 pps below the series high of 12.3% in 2017.

  • The business death rate remained highest for the Transport and storage (including postal) industry (19.7%). This industry has large numbers of small or single-person courier businesses established to meet the demand for home delivery.

  • Business administration saw a large increase in business deaths, resulting in a 4.2 pps increase in the death rate which was 12.5% in 2021, the highest since 2010.


Figure 3: Business birth and death rates are highest for the Transport and storage industry and lowest in Health.

Birth and death rates for businesses registered in Northern Ireland by Industry, 2021


2. UK Comparison


Trends in UK business births and deaths

  • Business birth rates have increased for all four UK regions during 2021, following a decline the previous year.

  • Birth rates in England and Scotland remain below pre-pandemic levels, while the birth rate in Wales is at a 17-year high. Northern Ireland has seen birth rates increase to their highest level in four years.

  • Business death rates increased across all four UK regions over the year to 2021.

  • Scotland and Wales have witnessed their highest business death rates since the series began in 2005. Death rates in England are at their highest since 2017, with death rates in Northern Ireland at their highest since 2014.


Figure 4: Business birth rates have increased for all four UK regions over the year to 2021.

Business birth rates by UK region, 2010 to 2021

Note: Improvements have been made to the birth and death rate methodologies for all data from 2016 onwards. Please see Section 7: Quality and Methodology for further details.


Figure 5: Business death rates have increased for all four UK regions over the year to 2021.

Business death rates by UK region, 2010 to 2021

Note: Improvements have been made to the birth and death rate methodologies for all data from 2016 onwards. Please see Section 7: Quality and Methodology for further details.


3. Survival Rates


A business is deemed to have survived if it is active or activated (birth) in a given year and remains active in terms of employment and/or turnover in subsequent years.

  • Northern Ireland had the highest 5-year survival rate of the four UK regions for registered businesses in 2016 (123.3 Index, UK = 100).

  • The Finance and insurance industry saw the highest 5-year survival rate in Northern Ireland, with 53% of registered businesses in 2016, still active in 2021.

  • For registered businesses in 2016, Northern Ireland also had the highest 3 and 4-year survival rates of the four UK regions, with England seeing the lowest rate in both instances.

  • There has been a decline in UK 1-year survival rates for registered businesses from 2016 to 2020, with 95.2% of registered businesses in 2016 surviving at least one year compared with only 92.9% of businesses in 2020.


Figure 6: Northern Ireland had the highest 5-year survival rate of the four UK regions for registered businesses in 2016.

Comparison of survival rates for registered businesses in 2016, Index, UK = 100


4. High Growth Businesses


A high growth business will have had at least 10 employees in 2018 and had an average growth in employment of greater than 20% per year between 2018 and 2021.

  • There were 195 businesses, registered in Northern Ireland, classified as high growth in 2021. This amounts to a high growth rate of 2.6%.

  • The number of high growth businesses declined for all four UK regions over the year to 2021, with Northern Ireland observing the sharpest decline (31.6%).

  • The high growth rate for Northern Ireland remained lower than the other UK regions. 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.


Figure 7: High growth rates have decreased for all four UK regions over the year to 2021.

High growth rates by UK region, 2016 to 2021


5. Employer Demography


Employer demography is an alternative measure of business demography based on businesses with at least one employee. Employer births include the number of new businesses with one or more employees, as well as existing businesses that have recently started to employ at least one person. Similarly, employer deaths include the number of employer businesses that have de-registered, as well as those that remain on the register, but no longer employ any staff.

  • There were 6,015 employer business births in Northern Ireland in 2021. This is an increase of 625 (11.6%) on the previous year, although it is a decrease of 370 (5.8%) on the series high observed in 2016 (6,385 businesses).

  • The employer business birth rate increased for all four UK regions in 2021, with Wales seeing the largest growth on the previous year (2.3 pps), and Northern Ireland the lowest (0.7 pps).

  • There were 4,135 employer business deaths in Northern Ireland in 2021, the highest since the series began in 2016. This is an increase of 835 (25.3%) on the previous year, which was the largest percentage growth of the four UK regions.

  • The employer business death rate in Northern Ireland (7.6%) remained below that of England, Scotland and Wales.


6. Background Notes


Business births and deaths are subject to revisions. The data presented in this release may not match previous publications in this series.

Data Sources
Business demography statistics are produced from the Inter-Departmental Business Register (IDBR). The two main sources of input for the IDBR are VAT and PAYE records from HM Revenue and Customs (HMRC). Additional information comes from Companies House, Dun and Bradstreet, and business surveys. The IDBR is, therefore, a register of all VAT and/or PAYE registered businesses in the UK. Small businesses that do not reach the tax threshold (turnover of £85,000 per annum) or do not have employees paid via PAYE are, in most cases, not included.

The Office for National Statistics (ONS) provides the Northern Ireland Statistics and Research Agency (NISRA) with birth, death and survival data from the Northern Ireland element of the IDBR. NISRA analyses these data and publishes business demography statistics for Northern Ireland.

Coverage
The data used for this publication relate 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 and/or PAYE registered, are included.

The data used for this publication exclude those businesses operating in Northern Ireland, which have their registered (or main) address elsewhere in the UK.

NISRA publish counts of businesses operating in Northern Ireland in the annual Northern Ireland Business; Activity, Size, Location and Ownership release. This publication provides counts of businesses operating in Northern Ireland, including those in the agriculture sector by industry and geographical breakdown.

Definitions
The statistics presented in this release have been produced using recommended definitions and methodologies outlined in the Eurostat and Organisation for Economic Co-operation and Development (OECD) manual on business demography statistics.

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 registered (or main) address elsewhere in the UK.

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 year t-3, and that had an average growth in employment of greater than 20% per year between t-3 and t. The high growth rates are calculated by showing these businesses as a share of active businesses with 10 or more employees in year t. Businesses born in t-3 and agriculture businesses are not included.

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.

Employer Demography
Employer births include the number of new businesses with one or more employees as well as existing businesses that have recently started to employ at least one person. Similarly, employer deaths include the number of employer businesses that have de-registered, as well as those that remain on the register, but no longer employ any staff. It is important to note that these counts include single employee companies where the employee is also the owner-director.


7. Quality and Methodology


The data used to produce the statistics in this report have been provided by the ONS. Business demography is produced from the Inter-Departmental Business Register (IDBR), which is sourced mainly from administrative data. It is important to note that data extracted from the IDBR will be impacted by the timeliness of administrative updates. Business demography data have been produced in line with European Union regulation, the SBS Recast Regulation 295/2002, which specifies the need for the annual collection of these data. The methodology and definitions used to create the data can be found in the joint Eurostat and Organisation for Economic Co-operation and development (OECD) manual on business demography. The ONS are continually trying to improve the quality of business demography statistics and have made a number of recent improvements in line with OECD recommendations:

  • The business demography data reference period records the number of businesses active over a period of a year. From 2016 onwards, the reference period changed from the 12 months to November, to the calendar year.
  • Deaths data have been adjusted to account for reactivations over the year.
  • Removal of businesses that only have a live company number and do not have a VAT or PAYE registration, as well as dummy enterprises generated for administrative purposes.

Further details on these changes can be found in the ONS Business Demography, UK: 2021 report.

Further detail on the quality of Northern Ireland business demography data, and the methodology used to produce them, can be found in NISRA’s Quality and Methodology Report.