London leads the UK for new business creation in 2020, with more than 130,989 startups created between January and August.
The first eight months of the year saw more than 130,000 new businesses created in the capital, up more than 21% on 2019’s figures, according to data from consultancy business SHL.
The number of London startups dwarfed other UK cities, with Birmingham named as the city with the second highest number of new businesses. Some 11,658 startups were created in the second city between January and August 2020, up 20% on last year.
With 1.3 million people on furlough at the end of March, rising to 9.6 million by August, and a historically difficult job market, people were busy creating their own opportunities. According to SHL, in June, when the furlough scheme had its first extension, new business creation boomed.
At its peak, new business creation in the UK was up 47% year on year, with nearly 25,000 more new businesses being created in June 2020 compared with June 2019. Between June and August an additional 59,358 new companies were created in the UK, compared to the same period in 2019.
This boost in company creation was, however, not evenly spread across regions. By far the biggest growth was in Greater London, where new business creation was up 19.16% year-on-year. In second place came Yorkshire and the Humber with 9.44% growth year-on-year and in third was the North East with 4.5% year-on-year growth.
But outside England the story is not as rosy with devolved regions seeing reductions. Northern Ireland, Scotland and Wales were down 7.63%, 6.05% and 5.93% respectively.
Sector winners and losers
Sectors that experienced some of the highest growth in new businesses included e-commerce (up 88%), clothing (up 55%) and retailers of medical goods, which SHL said was likely due to mask sellers, which was up a whopping 176%.
The number of bus and coach operators also increased substantially on 2019, up 330% from 65 operators in 2019, to 280 in 2020.
The industry that fared the worst for new business creation in the first eight months of the year were vets, down 48% year-on-year. Aircraft repair and maintenance was not far behind, down 44% on 2019.