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Statistical bulletin: Business Demography, 2011 This product is designated as National Statistics

Released: 13 December 2012 Download PDF

Headline figures

  • The number of business births increased by 26,000 (11.2 per cent) between 2010 and 2011.
  • The number of business deaths fell by 20,000 (7.9 per cent) between 2010 and 2011.
  • London had the highest business birth rate at 14.6 per cent. The North West had the highest business death rate at 10.7 per cent.

Summary

In 2011 there were 261,000 business births, that is new registrations, in the UK, a birth rate of 11.2 per cent. This was compared with 235,000 births in 2010, a birth rate of 10.0 per cent. In 2011 there was also an 11.2 per cent increase in the number of business births.

Provisionally for 2011 there were 230,000 business deaths i.e. business de-registrations, a death rate of 9.8 per cent. This compares with 250,000 business deaths in 2010 and a death rate of 10.6 per cent. In 2011 there was a 7.9 per cent decrease in the number of business deaths.

Figure 1: Business birth and death rates

Business birth and death rates
Source: Office for National Statistics

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There were approximately 2.34 million active businesses in the UK during 2011, a decrease of 8,800 on 2010.  Estimates for 2011 are available in greater geographical and industrial detail from the tables published on the Office for National Statistics website.

Table 1 - Business birth and death rates 2002 -2011

Counts given to the nearest thousand
  Active (000s)   Births (000s) Deaths (000s)
Count Rate (%) Count Rate (%)
2002 2,115 243 11.5 213 10.1
2003 2,136 267 12.5 232 10.9
2004 2,159 280 13.0 244 11.3
2005 2,183 275 12.6 228 10.5
2006 2,207 256 11.6 207 9.4
2007 2,280 281 12.3 224 9.8
2008 2,326 267 11.5 223 9.6
2009 2,342 236 10.1 277 11.8
2010 2,351 235 10.0 250 10.6
2011 2,343 261 11.2 230 9.8

Table source: Office for National Statistics

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Business births and deaths by broad industry group

In 2011 the highest rate of business births occurred in information & communication with 14.8 per cent. This was followed by professional; scientific & technical with a birth rate of 14.3 per cent and business administration & support services with a birth rate of 14.1 per cent. In terms of the overall number of births, professional; scientific & technical created the highest number of businesses at 59,000.

The highest business death rate, at 11.9 per cent, was in business administration and support services.  This was followed by finance and insurance at 11.5 per cent. In terms of the overall number of deaths, professional; scientific & technical had the highest at 39,000 followed by construction at 35,000 and business administration and support services at 25,000.

Table 2 - Births and death rates by broad industry group, 2011 - UK

Counts given to the nearest thousand
  Active (000s) Births (000s) Deaths (000s)
Count Count Rate (%) Count Rate (%)
Production 149 12 8.2 13 8.5
Construction 315 30 9.5 35 11.1
Motor trades 75 6 8.4 6 7.6
Wholesale 117 10 8.7 11 9.0
Retail 217 23 10.5 21 9.7
Transport & storage (inc. postal) 78 8 10.4 8 10.6
Accommodation & food services 160 19 12.1 18 11.3
Information & communication 178 26 14.8 18 9.8
Finance & insurance 34 4 10.2 4 11.5
Property 88 8 9.1 8 9.6
Professional; scientific & technical 409 59 14.3 39 9.6
Business administration and support services 207 29 14.1 25 11.9
Education 35 3 9.4 3 8.7
Health 95 8 8.2 6 6.4
Arts; entertainment; recreation and other services 185 16 8.5 16 8.6
           
Total 2,343 261 11.2 230 9.8

Table source: Office for National Statistics

Table notes:

  1. The deaths counts provided in this table are provisional. For more details please refer to the background notes.

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Business births and deaths by UK region

Within the regions, London had the highest business birth rate at 14.6 per cent followed by the North East (11.2 per cent) and North West (11.1 per cent). The region with the highest business death rate was the North West at 10.7 per cent, narrowly followed by London at 10.4 per cent.  Northern Ireland had the lowest birth and death rates at 6.5 per cent and 8.6 per cent respectively. The highest number of births and deaths were seen in London, at 61,000 and 44,000 respectively.

Table 3 - Birth and death rates by region, 2011 - UK

Count given to the nearest thousand
  Active (000s) Births (000s) Deaths (000s)
 Count Count Rate (%) Count Rate (%)
North East 63 7 11.2 9 9.9
North West 231 26 11.1 25 10.7
Yorkshire and The Humber 165 17 10.5 16 10.0
East Midlands 155 16 10.3 15 9.8
West Midlands 187 20 10.5 19 10.0
East  237 25 10.5 23 9.6
London 421 61 14.6 44 10.4
South East 376 41 10.8 36 9.5
South West 205 20 9.6 19 9.2
Wales 89 8 9.3 8 9.5
Scotland 156 17 10.9 14 9.1
Northern Ireland 57 4 6.5 5 8.6
           
Total 2,343 261 11.2 230 9.8

Table source: Office for National Statistics

Table notes:

  1. The deaths counts provided in this table are provisional. For more details please refer to the background notes.

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Business survivals

The UK five-year survival rate for businesses born in 2006 and still active in 2011 was 45.0 per cent. By region, the highest five-year survival rate was in Northern Ireland at 50.5 per cent, while the lowest was in London at 41.8 per cent. By broad industry, some notably high five-year survival rates include health with a survival rate of 60 per cent and education with a survival rate of 52.8 per cent. Hotels & catering was the lowest with only 35.7 per cent of businesses surviving for five years.

Survival rates are available from one-year to five-year in greater geographical and industrial detail via the tables published on the Office for National Statistics website.

Table 4 - Survival rates of businesses born between 2006 and 2010, UK

Rate (per cent)    
  Births 2006 Births 2007 Births 2008 Births 2009 Births 2010
One year survival 96.5 95.4 92.0 90.8 86.7
Two year survival 80.7 81.1 74.0 73.8 ..
Three year survival 66.2 63.0 58.0 .. ..
Four year survival 53.2 52.0 .. .. ..
Five year survival 45.0 .. .. .. ..
           

Table source: Office for National Statistics

Table notes:

  1. .. Data not available.

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Background notes

  1. Demography data source

    To support this release a set of reference tables in greater geographical and industrial detail have been produced and are available.

  2. Estimates presented in this release and the associated published tables are rounded to prevent disclosure. Differences may exist in totals across tables due to disclosure methods used.

  3. This release is produced from an extract taken from the Inter-Departmental Business Register (IDBR) recording the position of units as at November of the reference year, and excludes central government and local authorities. The data is produced using the guidelines found in the Eurostat/OECD manual on Business Demography

  4. There are two key differences between this release and the statistics produced by Eurostat.  Firstly, in this release an adjustment has been made to the deaths data to allow for reactivations, which enables more accurate estimates to be published.  Secondly, managed-service companies are excluded from this release, but included in the data supplied to Eurostat. These differences are explained more fully below.

  5. Although the statistics in this release are derived from the IDBR, the total stock of active businesses is greater than the UK Business: Activity, Size and Location publication. This is mainly because the definition of an active business is based on activity at any point in the year, whereas UK Business: Activity, Size and Location is based on an annual snapshot at a point in time. 

  6. Adjustments to deaths to anticipate reactivations

    In order to publish estimates within a year of the reference period, ONS has made an adjustment to the deaths figures in this release to allow for reactivations. Reactivations occur due to lags in the administrative sources (VAT/PAYE), which mean it is possible that a business that is continuing to trade can appear to cease on the IDBR.  If an old VAT scheme is de-registered and there is a delay in the creation and/or matching of the new VAT scheme it can leave the enterprise without a live administrative source resulting in it being automatically flagged as a death.  Additionally, VAT based units where turnover drops to zero are automatically made dead on IDBR, but will rebirth if turnover is then reported in a later period. These units will appear to move from the active stock into the death counts then come live again as births. In order to prevent distortion in these figures, those businesses that ‘reactivate’ on the register within two years of death are treated as if they have continued to trade throughout the period.

  7. ONS has departed from the Eurostat/OECD manual at this point. The manual recommends waiting for two years after the reference period to allow for reactivations before deaths are calculated. Instead, ONS has estimated the number of reactivations. This adjustment has been applied to all industries, by removing units from the death data. This can lead to different percentage adjustments at the lowest level of aggregation. Since the level of reactivations is subject to some uncertainty, the latest two years in the publication are considered to be provisional and subject to revision. The table below shows the adjustments made to the death data for reactivations.

    Table 5 - Adjustment made to deaths figures to account for reactivation of businesses, UK

      First Estimate   Second estimate Final estimate
    unadjusted estimated reactivations  adjusted   unadjusted estimated reactivations  adjusted  
    2009 297 18 279   281 4 277 277
    2010 315 18 297   253* 3 250*  :
    2011 244 14 230    :  :

    Table source: Office for National Statistics

    Table notes:

    1. * A separate revision, not related to reactivations occurred in 2010. Please see background note on revisions.

    2. :This symbol represents 'not applicable'.

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  8. Managed service companies

    Managed service companies have been excluded from this release, but are included in the statistics published by Eurostat for Business Demography. ONS excludes these companies from all outputs because they are registered at the address of a service company provider, and therefore distort the geographical location and industry of the businesses as well as business demography changes. The table below shows the number of managed service companies excluded in each year.

    Table 6 - Number of managed service companies excluded from business demography, UK

    Counts given to the nearest thousand
      Active (000s) Births (000s) Deaths (000s)
    2005 73 24 8
    2006 95 28 12
    2007 133 51 33
    2008 135 37 54
    2009 79 3 47
    2010 29 2 12
    2011 20 2 5

    Table source: Office for National Statistics

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  9. Revisions

    The latest two years’ estimates on births, deaths and survivals are subject to revision. Revisions would normally be made in the following year’s publication.

    Revisions to 2010 have been larger than usual. The deaths data are always subject to revision due to the estimation of reactivations, but in 2010 there is a further revision. Approximately 50,000 of the 2010 revision is caused by the way new businesses identified by improvements to HMRC systems, have been processed on the IDBR. This change has also led to a 50,000 revision to the 2010 active business count.

  10. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure they meet customer needs. They are produced free from any political interference. 

  11. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Statistical contacts

Name Phone Department Email
Karen Watkins +44 (0)1633 456254 Business Register Strategy Output karen.watkins@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
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