The Northern Ireland Inter Departmental Business Register (IDBR), which counts businesses registered for VAT or operating a Pay As You Earn (PAYE) scheme, showed 74,060 firms on its books in March 2018, 2,445 or 3.4% more than in 2017.
It doesn’t include micro-businesses falling below the VAT threshold or those which don’t operate a PAYE scheme. It means many self-employed workers are not counted on the register.
It’s the fourth year running that the number of businesses has increased in Northern Ireland. It follows a sustained period of post-recession decline between 2008 and 2014.
But while the number of new firms appearing on the register increased by 16%, the number closing also rose for the third consecutive year. It leaves Northern Ireland business ‘birth rate’ at 11%, the lowest among the UK countries.
Construction recorded the largest increase during the year, with 535 businesses emerging on the register.
The agriculture, forestry and fishing sector, which accounts for 25% of all businesses, also grew, with 440 more companies registered.
Economist Andrew Webb, a director at business advisory firm Baker Tilly Mooney Moore in Belfast, said the figures offered some positive indicators.
“Encouragingly, one in five of the new businesses were in construction which is always a good bellwether of how the wider economy is faring.”
However, he said that the good news was tempered by Northern Ireland’s rates of growth, which he said remain “stubbornly lower” than in the other UK countries.
“Enterprise is a key driver of productivity and economic growth and we need a step change in the rates of business starts here,” said the economist.
“Achieving this step change has been puzzling policy makers for decades, but there is evidence from the Global Entrepreneurship Monitor that our younger generations are more open to the idea of starting their own businesses.
He continued: “Initiatives such as the various incubators that are springing up across the city will help increase the profile of entrepreneurship and hopefully lead to a more dynamic business start-up community.”
All council areas saw an increase in the number of businesses over the year. Newry, Mourne and Down topped the growth table with 410 more businesses, while Belfast remained Northern Ireland’s business centre, with 10,560 firms employing 30% of the workforce here.
The Mid Ulster district contains the second largest number of NI businesses (8,865), just ahead of Armagh, Banbridge and Craigavon (8,555), Newry, Mourne and Down (8,520), and Fermanagh and Omagh (8,055).
Of the 74,060 registered firms, just 2.4% were non-NI owned.
However, those businesses account for a quarter of all employees. Some 88% of all companies on the register employ less than nine people.
