Business Demography, Uk: 2023 Annual Change In The Number Of Uk Businesses Broken Down By Sector Of The Economy.

18th November 2024

Between 2022 and 2023, the number of UK business births decreased from 337,000 to 316,000; this has led to a fall in the business birth rate from 11.5% to 11.0%.

The number of UK business deaths fell from 349,000 to 309,000 between 2022 and 2023; this has led to a decrease in the business death rate from 11.9% to 10.8%.

The transport and storage (including postal) industry had the highest business birth rate, at 14.5%, and the highest death rate, at 21.6%.

In 2023, there were 13,750 high-growth businesses in the UK, measured by employment, compared with 11,480 in 2022.

Business birth and death rates, 2018 to 2023
In 2022, business deaths exceeded the births for the first time since 2010. In 2023, there was a return to the birth rate (11.0%) exceeding the death rate (10.8%). This is mainly because the death rate decreased by more than one percentage point (11.9% to 10.8%). The birth rate, though higher than the death rate, is the lowest it has been since 2010.

There were approximately 2.9 million active businesses in the UK during 2023, a decrease of 54,000 from the number of active businesses in 2022 (Table 1). Estimates for 2023 are available in greater geographical and industrial detail in our Business demography, UK dataset.

Industries with the highest business birth and death rates
There was a decrease in the business birth rate in 7 out of the 15 industry groups between 2022 and 2023. The largest fall came from transport and storage, which accounted for 70% of the fall in the overall birth rate.

Although transport and storage has the highest business birth rate of the industry groups since 2017 (at 14.5%), its business birth rate has seen a large decrease of 6.7 percentage points since 2022. The transport and storage death rate continues to be considerably higher than its birth rate for 2023, at 21.6% and 14.5%, respectively. This industry has shown volatility in the number of business births and deaths in recent years. Large increases in births between 2018 and 2021 have been replaced by decreases. The largest decrease in this industry since last year was in other postal and courier activities, where the number of births dropped by over one-half.

Over three-quarters of the businesses in other postal and courier activities are sole proprietors and, in 2023, 18% of the businesses in this industry were born and died within the same year. This industry also showed the largest decrease in the number of deaths, which was particularly high last year, when the death rate was 36.6% (compared with 27.8% in 2023) and 28% of the businesses born in 2022 died the same year.

Births and deaths of businesses can also be measured by employer business demography. This measure not only shows the number of new business births (with one or more employees) but also the existing businesses that have started to employ at least one person. Likewise, the deaths not only show the number of businesses with employees that cease to trade but also the number of businesses that have stopped employing staff.

Tables 3 and 4 show business births and deaths broken down by industry. They compare the total number of businesses, the businesses with at least one employee, and those businesses with two or more employees.

Most industries had a large proportion of business births that were either sole-proprietor or single-employee businesses in 2023. For example, nearly 85% of births in the transport and storage industry in 2023 were in one of these categories. Conversely, the accommodation and food services industry shows almost the opposite, with over 70% of businesses having two or more employees.

Regions with the highest business births and deaths
At a regional level, London had the highest business birth rate, at 12.6%. However, this is the lowest birth rate for London since 2009. The main industry contributing to the births in London was professional, scientific and technical, at 17.9%, with management consultancy businesses contributing to almost half of this increase.

The West Midlands was the region with the highest business death rate, at 12.4%. The biggest proportion of these deaths was in transport and storage, at 17.5%. Freight transport by road and removal services contributed to over half of this increase.

Regional five-year survival rates
The region with the highest five-year survival rate was Northern Ireland, at 47.7%. The survival rates show the percentage of businesses that survived into 2023. Northern Ireland, for the third year running, has shown the highest five-year business survival rate. The largest proportion of these surviving businesses were in the construction industry.

The region with the lowest five-year survival rate was the West Midlands, at 34.7%.

Breakdown by region
London was the region with the largest number of businesses showing high-growth, at 3,305 businesses, with a high-growth rate of 6.3%. Northern Ireland had the smallest high-growth rate, at 3.1%.

All regions saw an increase in high-growth in 2023. The region with the highest increase in growth rate was London, up 1 percentage point.

To see charts showing each region including Scotland go to the link below.
Read the full ONS report HERE