New Business Demography Figures For 2008

The Office for National Statistics (ONS) has begun publishing details of business start-ups, closures and survival rates called 'Business Demography:Enterprise Births and Deaths'. The BERR is discontinuing the series, 'Business Start-ups and Closures: VAT registrations and de-registrations'. The last publication will be the 2008 update after that it will be replaced with the new ONS series. The new business demography statistics are considered more comprehensive. There are methodological differences.

The European Commission brought out a new regulation in February that requires National Statistics Institutes to produce statistics on business births, deaths and survival rates. They will produce statistics using a common methodology and definitions which will ensure greater comparability across the EU. One of the main differences is the inclusion of PAYE registered units, that is, employing businesses which are not VAT registered. It will provide a more comprehensive view of business start-up activity.

The new business demography statistics will show more business births and deaths than the BERR VAT-based statistics. The broad trend of volume and rate of births and deaths are the same but the peaks appear slightly earlier in the BERR series. Both ONS and BERR sets of statistics show differences between volumes and rates, but in both, the highest rates of births and deaths seem to be in London and lowest in Northern Ireland.

The statistics for 2008 published on Monday tell us that there were 270,000 business births in the UK in 2008, a birth rate of 11.6%. In 2007, there were 281,000 births (12.3%). That means there was a decrease of 3.7% in the number of business births. There were 'provisionally' 219,000 business seaths, a rate of 9.4% in 2008 compared with 223,000 deaths in 2007, a rate of 9.8%. There was a 1.8% decrease in the number of business deaths.

Active businesses numbered over 2.3 million in the UK during 2008, down 46,000 on 2007. The highest rate of business births was in business administration and support services with 16.2% followed by professional, scientific and technical services at 14.7% and information and communication at 14.6%. The highest overall number of business births was in professional, scientific and technical with 54,000. The highest death rate was in accomodation and food services at 13.1%, following this came finance and insurance at 11% and business administration and supprt services at 10.8%. Construction had the largest overall number of deaths at 33,000 then profesional, scientific and technical with over 32,000.

The business survival rate is based on a five-year survival rate. In 2008, the 5=year survival rate was 46.6%. Northern Ireland had the largest 5-year survival rate in the UK and London the lowest at 39.4%. Hea;lth had a survival rate of 63% and education 60.3% but hotels and catering were lowest with 34.2%.

Further details on the methodology can be obtained from the ONS website.