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Fall in number of start-up firms in the first quarter

THE number of businesses starting up in Scotland fell by nine per cent in the first quarter compared with the same period last year on one measure, in spite of the improvement in the economy.

The Committee of Scottish Clearing Banks said its members recorded 2,705 start-ups in the first three months of the year, down 269 from 2,974 in the same period.

The numbers cover businesses opening accounts with Royal Bank of Scotland, Lloyds Banking Group's Bank of Scotland and TSB arms and Clydesdale Bank.

Start-up numbers in the first quarter were up 10 per cent on the 2,465 recorded in the last three months of 2013, in line with the trend for activity to increase in the first quarter of the year following the holiday period.

However, the first quarter numbers from banks that dominate the Scottish market suggest start-up activity was running at half the level recorded before the downturn.

The Committee of Scottish Clearing Banks logged 5,550 start- ups in the first three months of 2008.

The number of start-ups in the wholesale and retail trade category fell sharply, to 378 in the first quarter from 473 in the same period of 2013. People may be wary of moving into some sectors that suffered in the downturn.

However, the number of real estate, renting and similar business start-ups increased to 767 from 682 amid a recovery in the property market.

The fall in the overall number of start-ups may partly be a product of the economic recovery and the related improvement in the labour market.

Many people started businesses after being made redundant during the downturn.

The number of sole traders registered in the first quarter fell 27 per cent annually, 314, to 855 from 1,169.

New partnership numbers fell to 201 from 250.

The number of limited companies starting up in the first quarter increased by six per cent, 94, to 1,649 from 1,555.

Colin Borland, head of external affairs at the Federation of Small Businesses in Scotland, said its members are feeling increasingly confident.

Hugh Lightbody, chief officer at the national unit of the Business Gateway advice service, said: "The number of both new starts and existing businesses that are coming to Business Gateway for support is increasing."

"Figures from Companies House show that the number of businesses being registered in Scotland was up nine per cent for the year ended March 2014."

A Scottish Government spokesperson said it remains firmly committed to maintaining a supportive business environment and is delivering the most competitive business tax environment anywhere in the UK through business rates policies worth over £590 million a year.

The spokesperson said the official Scottish EDGE fund had awarded around £2m to 54 companies judged to have high potential.

There were 262 start-ups in the city of Glasgow in the first quarter and also 327 in the same period of 2013.

There were 249 start-ups in Edinburgh, down from 297. Start- ups increased in the Aberdeen area, to 365 from 331.

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