Company start-up levels hit the lowest point in five years in the first half of 2020, the latest figures from credit risk analyst CRIF Vision-net show today.
A total of 9,853 company start-ups were recorded in the first half of 2020 amid the coronavirus pandemic, the lowest number on record since the first half of 2015 when 8,981 companies were set up.
Today's figures show that between the months of February and May, there was an almost 30% decline in start-ups compared to the same time in 2019.
April was the worst month for start-ups since December 2012, CRIF Vision-net said.
But it added that despite the overall decrease in activity among the start-up community, there are early signs of post-lockdown recovery.
New company start-ups rose to 1,701 during the month of June, an increase of 7% compared to the same month last year.
Today's figures also show that the impact of the Covid-19 pandemic on the start-up community was evident across the entire country in the first half of the year, with Tipperary the only county to record a year-on-year increase in start-up figures.
Westmeath recorded the largest percentage decrease - 99 start-ups were registered in the first half of 2020, a decline of 38% compared to the same time in 2019.
Meanwhile, the overall insolvency rate for the first half of 2020 was down 27% compared to the same time in 2019, totalling 240 insolvencies for the six months from January to June.
The decline in insolvencies can be widely attributed to the closure of courts during the Covid-19 pandemic and the current Government stimulus packages.
The largest numbers of insolvencies were recorded in the month of February, with a total of 72 insolvencies - an increase of 60% compared to February 2019.
April saw the smallest number of insolvencies at 12. This was down 71% on 2019.
But a significant rise in insolvency figures is projected for the second half of the year with courts beginning to resume and operate in a post-lock down environment.
Christine Cullen, Managing Director of CRIF Vision-net, said today's figures clearly show how the Covid-19 pandemic has taken its toll on company formation and the broader Irish economy.
She said that at the start of the year, Ireland looked to be in extremely good economic health and for the first time ever company start-up registrations exceeded 2,200 in a single month.
"However, Covid-19 led to an early dip in this figure, with levels starting to drop off as early as February. The full brunt of the pandemic was particularly evident in the month of April when numbers dropped to the lowest in eight years," Ms Cullen said.
"Thankfully, new company start-up figures for June may suggest the beginnings of a recovery. We must now build on this. The Government's July Stimulus Package is a vital step in the right direction, demonstrating strong commitment to rebuilding the economy at all levels," she added.
Ms Cullen said that supports including the extension of the Restart Grant for Enterprises and the Future Growth Loan Scheme will most certainly be welcomed by those in the business community and will play a massive role in the recovery of the sector going forward.
"To this end, it is vital that industry and Government continue to work together to ensure that the necessary supports remain available to businesses in this challenging period," she stated.