Number of businesses in the UK increases by 46,000

There were 46,000 more businesses in the UK at the start of this year than the beginning of 2022, official figures have revealed.

According to the Department for Business and Trade's latest business population estimates, the number of private sector enterprises increased by 0.8%.

Of the 5.6 million businesses in the UK at the start of 2023, the vast majority were small with 5.51 million having 0 to 49 employees. Of those small businesses, 4.1 million (74% of the total) did not employ anyone apart from the founder(s).

The rest of the figures were made up of 36,900 medium-sized businesses (50 to 249 employees) and 8,000 large companies.

The rise was driven by an increase in non-employing micro businesses which rose by 49,000. In contrast, the employing businesses decreased by 3,000.

Changes in the number of businesses, by legal status, between the start of 2022 and the start of 2023:

Turnover and employment

In terms of turnover and total employment, the follow figures were recorded:

• total employment in SMEs was 16.7 million (61% of the total) and turnover was £2.4 trillion (53%)

• employment in small businesses was 13.1 million (48%) and turnover was £1.6 trillion (36%)

• employment in medium-sized businesses was 3.6 million (13%) and turnover was £0.8 trillion (17%)

• employment in large businesses was 10.8 million (39%) and turnover £2.1 trillion (47%)

Countries and regions

"Private sector businesses are not evenly distributed across the UK," the report said, with London and the South East of England home to "considerably more businesses" than any other UK country or region of England.

In total there were 4.9 million private sector businesses in England, 298,000 in Scotland, 219,000 in Wales, and 122,000 in Northern Ireland

Of the 4.9 million firms, 1.0 million firms were in London and 852,000 in the South East of England. This accoounts 34% of the UK business population

At 156,000, the North East was the English region with the fewest businesses.

Between the start of 2022 and the start of 2023, business numbers increased by 95,000 in England and by 300 in Wales. They decreased in Scotland (43,000) and Northern Ireland (6,000).

Number of businesses in the UK per 10,000 adults, UK region and country, start of 2023:

Industries

Small and medium sized enterprises (SMEs) account for at least 99% of the overall population in each of the main industry sectors.

At the start of 2023, the largest number of SMEs (883,000 or 16%) were operating in construction, compared with less than 1% in the mining, quarrying and utilities sector (24,000).

There were also a large numbers of SMEs carrying out the professional, scientific and technical activities (770,000 or 14%), and operating in the wholesale and retail trade and repair sectors (546,000 or 10%).

Trends in the business population since 2010

The report also looked at business population trends since 2010.

Between 2010 and 2023:

• the business population increased by 1.1 million (24%).

• business numbers increased from 4.5 million in 2010 to a peak 6.0 million at the start of 2020, prior to the COVID-19 pandemic and the UK's withdrawal from the European Union.

• the highest rate of increase was 6.8% between 2013 and 2014, followed by 5.0% between 2011 and 2012.

• in contrast, the decrease of 6.5% between 2020 and 2021 is the largest of three year-on-year decreases in the series since 2010, all of which have occurred since 2017.

Between 2020 and 2023:

• the business population decreased by 425,000 (7.1%).

• numbers of employing businesses increased by 32,000 (2.3%), whilst non-employing business numbers decreased by 458,000 (10.0%).

• the decrease in non-employing businesses resulted from a decrease of 414,000 (12.4%) unregistered businesses and a decrease in non-employing registered businesses of 44,000 (3.5%).

Between 2022 and 2023:

• the total business population increased by 46,000 (0.8%).

• numbers of employing businesses decreased by 3,000 (0.2%), whilst non-employing business numbers increased by 49,000 (1.2%).

• the increase in non-employing businesses resulted from a increase of 81,000 (2.9%) unregistered businesses, and a decrease in non-employing registered businesses of 32,000 (2.6%).

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