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

Contact: Neil Mulhern
Email:
Publication Date: 25 January 2024

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 2022. 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 2022.

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

Trends in business births

  • There were 5,385 business births in Northern Ireland over the year to December 2022, which is a decrease of 19.1% on the previous year. This amounts to a birth rate (proportion of active businesses) of 8.3%.

  • The business birth rate in Northern Ireland saw a decrease of 2.0 percentage points (pps) over the year and is at its lowest level since 2014.

Trends in business deaths

  • There were 5,290 business deaths during the year to December 2022, which is an increase of 4.3% on the previous year. This amounts to a death rate of 8.2%.

  • The business death rate in Northern Ireland saw an increase of 0.4 pps over the year and is 0.9 pps below the series high in 2012. The business death rate has risen above 8.0% for the first time since 2013.


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

Birth and death rates for businesses registered in Northern Ireland, 2005 to 2022

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 seven district council areas across Northern Ireland. Belfast had the highest number of births and deaths (1,055 births and 1,030 deaths), whilst Antrim and Newtownabbey had the lowest number of births and deaths (305 births and 350 deaths).

  • Birth rates decreased for all eleven district councils in Northern Ireland over the year to December 2022. Belfast had the highest business birth rate (9.2%) while Mid Ulster had the lowest birth rate (6.8%).

  • Death rates increased for eight district council areas over the twelve month period. Antrim and Newtownabbey, Belfast, and Lisburn and Castlereagh saw a decline in the business death rate. Mid Ulster continued to have the lowest death rate (6.3%) across the region for the eighth consecutive year, whilst Ards and North Down had the highest death rate (9.7%).


Figure 2: The number of business births was greater than the number of deaths for seven district council areas across Northern Ireland in 2022.

Number of births and deaths for businesses registered in Northern Ireland by District Council Area, 2022


Industry

  • Business birth rates decreased for the majority of the broad industry groups over the year to December 2022.

  • Of those industries that saw an increase in their birth rate, the largest growth was in Business administration and support services, which grew by 1.3 pps, to 13.7%. Education, Health, and Arts, entertainment and recreation saw small increases of less than 1 pps.

  • Construction had the highest number of business births in 2022 (975), although this was a decrease of 175 on the previous year, which amounted to a decline of 1.5 pps in the birth rate.

  • Transport and storage (including postal) saw the largest decline in the number of births, down by 480 businesses compared with 2021, amounting to a decrease of 10.2 pps in the birth rate. This industry saw significant increases in the number of businesses since 2019, which coincided with the COVID-19 pandemic and the need for home delivery services.

  • Business death rates increased for the majority of the broad industry groups over the year to December 2022.

  • Construction had the highest number of business deaths in 2022 (970), an increase of 235 on the previous year, which amounted to an increase of 1.8 pps in the death rate. This was the highest number of business deaths in Construction since 2013.

  • In 2022, the number of deaths in the Production (405), Arts, entertainment and recreation (375), and Motor trade (215) industries were the highest since the series began in 2009.


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, 2022


2. UK Comparison


Trends in UK business births and deaths

  • In the UK, the business death rate (11.8%) was higher than the business birth rate (11.5%) in 2022, which is the first time this has happened since 2010.

  • Scotland was the only one of the four regions to see an increase in the birth rate over the year. It saw a small rise of 0.1 pps to 10.8%, although remained below the series high of 13.3% in 2013.

  • Business birth rates declined sharply in Wales (1.6 pps) and Northern Ireland (2.0 pps) over the year, with England also showing a decline of just under 1 pps (0.9 pps). The birth rate in England in 2022 was 11.6%, the lowest it has been since 2012.

  • Business death rates, when compared with the previous year, showed small increases for England (0.8 pps), Scotland (0.1 pps) and Northern Ireland (0.4 pps), with Wales showing a small decline (0.3 pps).

  • In 2022, the death rate in both England (12.0%), and the UK as a whole, was at its highest since 2009, whilst Northern Ireland’s (8.2%) was the highest it has been since 2013. The death rate in Scotland was the highest since the series began in 2005.


Figure 4: In 2022, business birth rates declined across the UK, except for Scotland, which saw a small increase.

Business birth rates by UK region, 2010 to 2022

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: In 2022, business death rates increased across the UK, except for Wales, which saw a small decrease.

Business death rates by UK region, 2010 to 2022

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 businesses registered in 2017 (123.7 Index, UK = 100).

  • For businesses registered in 2017, Northern Ireland also had the highest 3 and 4-year survival rates of the four UK regions, with Wales seeing the lowest rate in both instances.

  • In 2022, the most recent survival rate figures for 1 to 4 years in Northern Ireland are all lower than survival rates for businesses registered in 2017.


Figure 6: Northern Ireland had the highest 5-year survival rate of the four UK regions for registered businesses in 2017.

Comparison of survival rates for registered businesses in 2017, Index, UK = 100


4. High Growth Businesses


A high growth business will have had at least 10 employees in 2019 and had an average growth in employment of greater than 20% per year between 2019 and 2022.

  • In 2022, there were 225 businesses, registered in Northern Ireland, that were classified as high growth. This amounts to a high growth rate of 2.9%.

  • The number of high growth businesses increased for all four UK regions over the year to 2022, but remain below the series highs observed in 2018.

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

High growth rates by UK region, 2017 to 2022


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 approximately 56,000 active, registered employer businesses in Northern Ireland during 2022. There were 5,520 employer business births in Northern Ireland, amounting to a rate of 9.9%.

  • The employer business birth rate decreased in all but one region across the UK in 2022, with Scotland the exception, which saw a small increase on the previous year (0.2 pps).

  • There were 4,155 employer business deaths in Northern Ireland in 2022, the highest since the series began in 2017. This was a small increase of 20 businesses (0.5%) on the previous year.

  • Employer business birth rates were higher than death rates for all UK regions except Scotland, in 2022. Northern Ireland continues to have the lowest employer birth and death rates of the four regions.


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.