Start-ups in the retail trade and wholesale sector jumped 88pc in Q1 over the same period in 2020 as ‘necessity-led’ entrepreneurship took off during the latest lockdown, according to business information provider CRIFVision-net.
Ireland experienced an 8pc year-on-year increase in new start-ups overall with 6,353 new companies registered, but certain sectors stood out for the level of activity.
In addition to retail and wholesale, with 438 new businesses, manufacturing (87pc), motoring (41pc), transport, and storage and communication (33pc) all saw substantial double-digit gains on the year before.
However, the sectors hardest hit by the pandemic – such as hospitality and construction – had declines in new business starts.
“Recent economic and operational challenges in other sectors, combined with a ‘nothing to lose’ mentality may have given rise to a new wave of necessity-led entrepreneurship,” said Christine Mullen, managing director of CRIFVision-net.
“This is particularly evident in relation to the retail trade and wholesaling industries who have experienced a notable increase in company start-ups over the last three months, despite being subject to ongoing restrictions. However, economic prospects for Q2 and beyond continue to hinge on the successful roll-out of the vaccine programme and the assumption of an easing of Covid restrictions in parallel.”
There was also a 7pc year-on-year increase in business insolvencies in the first quarter of 2021, according to the data.
Improvements in vaccination roll-out and the easing of some Level 5 restrictions has improved sentiment among businesses and households, according to a monthly Bank of Ireland survey.
The bank’s Economic Pulse, which survey’s 1,000 households and 2,000 companies each month, showed business confidence soared in April to near pre-pandemic levels.
The April figure came in at 85.4, 11.8 points higher than March and 51.1 above the reading for the same month in 2020, when Covid-19 had forced the country into the first lockdown of the pandemic. A reading of higher than 50 shows improving sentiment.
“Both the consumer and business mood brightened this month, helped by the baby steps being taken to restart the economy and society and the expectation of a more widespread reopening as we head into the summer,” said Bank of Ireland chief economist Loretta O’Sullivan.
“Businesses were also pretty upbeat about growth prospects further out, with three in five having ambitions to expand in the next one to three years, which is in line with the pre-Covid figure.”
The survey also found that more than half of businesses are expecting a near-term increase in activity, while 25pc are planning to hire new staff and three in 10 are considering pay rises.
EY’s latest economic forecasts have Ireland set to grow by 5pc in 2021 with full employment to recover in another two years.
The firm said the strong performance of the Irish economy reflects the strength of the country’s export base, which is dominated by pharma, ICT and agri-food – all resilient sectors during the pandemic.