The number of new company formations fell 12% in the first quarter of 2022 as the cost of living, energy price inflation and supply chain challenges gave prospective founders food for thought.
Figures from CRIFVision-net show around 5,600 new companies were incorporated during the three month period, while the number of companies dissolved rose 19% from the same period in 2021.
Christine Cullen, managing director of CRIFVision-net, attributed the fall to underlying hesitancy in the domestic and global economies.
"There was a reduction in the number of company formations in 16 counties, with rural counties faring better than cities. Leitrim (+42%), Longford (+35%), Laois (+21%) and Wexford (+13%) all saw increases.
Conversely, Dublin posted a 17% annual decline, Cork recorded a 5% fall, numbers in Galway dropped 18% and Limerick saw formation numbers recede by 3%.
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While growth slowed in manufacturing (-32%), motoring (-19%), transport, storage and communication (-15%) and social work (-10%), formation activity increases in the electricity, gas and water supply (+26%), hospitality (+14%) and construction (+5%) sectors.
"What growth in more rural locations may suggest is a shift in terms of the public’s expectations for different lifestyle choices seen through a gradual move away from the traditional big cities," Cullen commented.
"This could be a result of a shift to hybrid working and a hybrid working environment, as well as the housing shortage and high property and rent prices in Ireland’s urban centres.
“Some of the uncertainty is offset by the rebound felt in the hospitality and construction sectors, two of the industries that suffered most due to the pandemic health restrictions," she added.
An increase of 26% was recorded in the number of green-related start-ups in areas like recycling, solar and wind energy was seen during the period in the utilities sector.
Elsewhere, the return to the workplace post-Covid signalled a 7% increase in the educational sector.
Investment by venture capitalists in Irish tech start-ups and SMEs rose 44% to a record €1.3bn last year, according to the Irish Venture Capital Association VenturePulse survey.
(Pic: Getty Images)
