THE number of business start-ups in Scotland in the first quarter was down 31.9% on a year earlier, with sharp falls in the manufacturing, construction, and hotel and restaurant sectors, according to figures on bank account openings.
The Committee of Scottish Bankers said yesterday its member banks recorded 2974 business start-ups in the first quarter, down from 4365 in the opening three months of 2012. The committee's figures measure business start-ups based in Scotland which have opened accounts with Bank of Scotland, Lloyds TSB Scotland, Clydesdale Bank or Royal Bank of Scotland.
Mulling possible reasons for the drop in business start-ups, Garry Clark, head of policy and public affairs at Scottish Chambers of Commerce, said: "I think it is understandable if people are still shying away at this stage because there are still a lot of negative (economic) signs out there ... It is understandable people might still take a pessimistic view of the chances of success in business."
However, while cautioning there had been two or three false dawns in the past couple of years, he declared that Scottish Chambers saw more pluses than minuses in economic signals at the moment. Mr Clark added: "I think we are beginning to see some light at the end of the tunnel from our surveys. It is maybe slightly into the second half of this year before we will see that pick-up, and maybe there is still a bit of nervousness in terms of the signals that are out there at the moment."
He voiced hopes for a more sustainable uplift in confidence as the year progressed, in the context of business start-ups.
The broadly-based decline in the first-quarter business start-up figures came as a disappointment, after publication on Thursday of the latest Scottish Global Entrepreneurship Monitor (GEM), compiled by Professor Jonathan Levie at the University of Strathclyde.
This report found that, for the first time in its 12-year history, the Scottish estimate for total early-stage entrepreneurial activity matched the average for 20 innovation-driven economies and exceeded the average for the so-called Arc of Prosperity countries of Denmark, Finland, Ireland and Norway.
However, the rise in entrepreneurial activity in Scotland was fuelled partly by graduates launching their own businesses in response to a weak labour market. The GEM survey covers 2012 – a different period from the latest start-up figures from The Committee of Scottish Bankers.
Colin Borland, head of external affairs for the Federation of Small Businesses in Scotland, cited a move towards a "more freelance" economy and believed people operating on this basis might not be opening business bank accounts. Mr Borland said: "I think there is still a level of people out there who are ready to take the plunge, ready to start their own business but at the same time you can understand why, in the current climate, people are reluctant to formalise that."
He also noted businesses did not have to set up a bank account with one of the Scottish clearing banks involved in compiling the start-up figures, given the range of other players in the market.
Mr Clark cited a possibility that the fall in construction start-ups might reflect an improvement in this sector, with people more likely to find a job rather than having to set up on their own. But he also acknowledged the possibility that the drop in construction start-ups might reflect a lack of confidence.
In manufacturing, 164 start-ups were recorded by The Committee of Scottish Bankers' members in the first quarter, down 38% from 265 in the opening three months of 2012. In construction, 285 start-ups were recorded in the first quarter, down 44% from the figure of 507 for the same period of last year.
In hotels and restaurants, there were 299 start-ups in the first quarter, down from 410 in the opening three months of 2012, amid continuing weakness in consumer spending. In transport, storage and communication, the start-up figure of 157 for the first quarter was only about half of the corresponding number of 313 for the opening three months of 2012.
The number of start-ups recorded in the first quarter was up 9.5% on the figure of 2716 for the final three months of 2012 but this reflects seasonal factors. The year-on-year comparison strips out seasonal factors.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article