Digital Waves

In the current economic climate, it still surprises us that thecompany formation statistics have been reasonably resilient.

Pronouncements from Companies House over the last few months have suggested that the numbers of companies being formed have fallen considerably and this has been latched onto by some parts of the media.  However, the reality is different.

We have carried out an analysis of the formations from the first week of January to the end of May.  Whilst the year on year figures for the early months are showing a decline, the overall position is not so poor.  In fact, between 4 January and 24 May, 146,167 new companies were formed compared with 153,238 in the corresponding period for 2008, a fall of 4.61%.  However, if one reworks the figures excluding January, the fall is only 2.13% and seems to be improving all the time.  In fact taking the month of May alone, the figures are actually up by 6.8% with 33,685 companies formed in that period compared to 31,539 in 2008 for the corresponding period..

A four week rolling average also confirms the position with the statistics at the end of May suggesting an increase of 9.03%

So, is the credit crunch merely a storm in a media teacup. Probably not, but the future does seem alot less bleak that it did at the start of the year. The recession has undoubtedly had an impact across many sectors, but as our investigation suggests, not all.

We will be watching this data and updating it regularly, but if the company formation figures are anything to go by, there are definitely some encouraging signs.