UK business creation hits eight-year low, but real estate industry thriving
By Tara SammonsIn 2024, new company formations plummeted to 306,995, the lowest since 2017, according to Cynergy Bank's new ‘Business Births and Deaths Index’.
Cynergy’s business health score measures the ratio of new businesses created to those lost across various industries to give a snapshot of overall sector health.
For example, a score of 1.3 means for every one business going bust, 1.3 new businesses are being created.
According to this scoring system, the agriculture, manufacturing and production, and wholesale trade and transportation industries are suffering, all with scores of 0.89 and below.
Conversely, real estate, health and social care, and education are all thriving with scores of 1.3, 1.34, and 1.31, respectively.
London continues to outperform the rest of the country with a score of 1.12, compared to the national average of 1.03.
In contrast, the East Midlands and Wales are experiencing the most significant business closures, with scores of 0.94 and 0.95, respectively.
The employment outlook shows new businesses aren’t hiring as many people as they used to.
Job creation through new businesses barely outpaced losses from closures, with a net gain of 13,754 jobs in 2024 compared to 348,845 in 2017.
Nick Fahy, chief executive at Cynergy Bank, commented: "These figures present a sobering picture of the UK business environment and, with the National Insurance increase looming in April, it’s hard to see it improving in the immediate future.
“However, it's not all doom and gloom.
“Businesses in healthcare, real estate and education are booming.”
Keywords: new company formations, Cynergy Bank, business births and deaths index, 2024 business statistics, business health score, UK business environment, economic turbulence, real estate sector, commercial real estate, job creation, business closures, National Insurance increase