Research & Evaluation Statistical Bulletin November 2017 Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research Business Demography 2016 Related documents The Business Demography dataset is published annually by the Office for National Statistics (ONS) and is based on output from the VAT and PAYE administrative systems. It replaced the previous data on businesses in the UK that was based on those registering for VAT only. The Business Demography dataset contains information on the births and deaths of businesses and their survival rates. The Business Demography information is not the only information on businesses published by ONS. There is also the UK Business Survey, which contains data on business by size-band and turnover. Although this is also based on combined VAT and PAYE data the counts of businesses are different. Findings: Business births have increased in Kent (+395, +4.7%) since the previous year while they have increased in the South East Region by 0.7% and in Great Britain by 8.2% Business deaths have increased in Kent by 13.8% since last year. The South East Region also saw an increase of 14.5%, and Great Britain 15.8% The overall count of the number of active business is up on last year; Kent +5.2%, South East +4.3% and Great Britain +6.1% 1-year survival rates have fallen slightly since the previous year. 1 year survival rates in Kent were 90.8%, South East 90.6% and Great Britain 89.7% UK Business Survey Further information Research & Evaluation Business Strategy & Support Kent County Council Invicta House Maidstone Kent ME14 1XX Email: [email protected]Tel: 03000 417444
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Research & Evaluation Statistical Bulletin November 2017
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
Business Demography 2016
Related documents
The Business Demography dataset is published annually by the Office for National Statistics (ONS) and is based on output from the VAT and PAYE administrative systems. It replaced the previous data on businesses in the UK that was based on those registering for VAT only. The Business Demography dataset contains information on the births and deaths of businesses and their survival rates. The Business Demography information is not the only information on businesses published by ONS. There is also the UK Business Survey, which contains data on business by size-band and turnover. Although this is also based on combined VAT and PAYE data the counts of businesses are different. Findings: Business births have increased in Kent (+395, +4.7%)
since the previous year while they have increased in the South East Region by 0.7% and in Great Britain by 8.2%
Business deaths have increased in Kent by 13.8% since last year. The South East Region also saw an increase of 14.5%, and Great Britain 15.8%
The overall count of the number of active business is up on last year; Kent +5.2%, South East +4.3% and Great Britain +6.1%
1-year survival rates have fallen slightly since the previous year. 1 year survival rates in Kent were 90.8%, South East 90.6% and Great Britain 89.7%
UK Business Survey
Further information Research & Evaluation Business Strategy & Support Kent County Council Invicta House Maidstone Kent ME14 1XX Email: [email protected] Tel: 03000 417444
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
Page 1
Introduction
A new European Commission Structural Business Statistics Regulation came into force in February 2008, requiring National Statistical Institutes (NSIs) to produce statistics on business births, deaths and survival rates. These statistics will be produced using common definitions and methodology, which will ensure greater comparability across the EU. The Office for National Statistics (ONS) ‘Business Demography: Enterprise Births and Deaths’ dataset has been produced, based on this common methodology.
Previously, data on VAT registered businesses were published by the Department for Business, Enterprise and regulatory reform (BERR). The key difference between the BERR statistics and the new ONS Business Demography publication is the inclusion of PAYE registered units. Therefore the Business demography statistics additionally include the births and deaths of employing businesses, which are not VAT-registered but are PAYE registered, providing a more comprehensive view of business start-up activity. These businesses are identified in the Inter-Departmental Business Register (IDBR), ONS’ comprehensive database of UK Businesses.
The Office for National Statistics now has two sources of business survey data. In addition to the Business Demography dataset there is also the UK Business Survey. This is also based on VAT/PAYE data and is covered in a separate R&I bulletin entitled “The UK Business Survey” (see website www.kent.gov.uk/research).
The principal differences between the two datasets are that the Business Demography counts business activity during the course of the whole of the financial year, while the UK Business survey counts businesses at a fixed point in time, usually during March. This leads to higher counts of businesses in the Business Demography data.
The latest data from the Business demography dataset is for 2016 and the tables presented in this bulletin cover the period 2004-2016. The Business Demography dataset uses the term “enterprises”. For the purposes of this bulletin enterprises and business should be taken as referring to the same thing.
This bulletin is in two parts;
Part 1 looks at business births, deaths and stock.
Part 2 covers 1 and 3 year survival rates of newly formed businesses.
This bulletin will be updated in November 2018.
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Part 1 Business births, deaths and stock
Part 1 the number of business births, deaths and stock for the Kent Districts and Medway, from 2004-2016.
The data shows the impact on business creation and survival during the pre- and post- recession periods. A clearer picture is now emerging about the impact of the recession. While some areas continued to see declines in the numbers of businesses in the first years following the recession, the latest data shows that the number of births has been consistently outweighing the number of deaths over the last three years, showing encouraging signs of sustained growth.
Table 1 shows enterprise births and Chart 1 shows the data for the Kent area.
Table 2 shows enterprise deaths and Chart 2 the data for Kent.
Table 3 shows the ratio of enterprise births to deaths.
Table 4 shows the stock of active enterprises and Chart 3 shows the data for Kent.
Table 5 shows the net gain in new businesses. This is expressed as births minus deaths. This net figure is also shown as a proportion of the total stock of businesses in Chart 4.
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
Medw ay UA 970 980 880 890 900 740 745 875 940 1,215 1,230 1,370 1,470 500 -1.8% 100 7.3%
All numbers rounded individually.Source: Business Demography Dataset, ONSPresented by: Research & Evaluation, Kent County Council
Change2004-2015 Change 2015-2016
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Table 1 and Chart 1 both show a general trend of decline in business births between 2004 and 2010, despite gains in some areas during 2007, just prior to the start of the recession. Overall since 2010 the number of business births has grown.
The number of business births has increased in all Kent districts in recent years, however there were fewer new enterprises being created fell in Maidstone, Sevenoaks and Tonbridge and Malling districts in 2016 than the previous year.
Medw ay UA 835 750 835 865 780 895 795 715 875 750 885 955 1,080 245 -1.6% 125 13.1%
All numbers rounded individually.Source: Business Demography Dataset, ONSPresented by: Research & Evaluation, Kent County Council
Change2004-2016 Change 2015-2016
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Table 2 shows the number of business deaths from 2004-2016. It shows that over the last year, there has been an increase in the number of enterprise deaths in all Kent districts. The number of enterprise deaths has increased rapidly over the last two years and in 2016 Kent saw more businesses fail than in 2009 (mid recession).
Chart 2 shows the number of business deaths in Kent between 2004 and 2015.
Chart 2: Business Deaths 2004-2016
Table 3 shows the ratio of business births to deaths, over the period 2004 to 2016. A ratio of births to deaths above 1.0 means that there has been more enterprise births than deaths.
The table clearly shows the post recession effects between 2009 and 2012. The ratio of births to deaths made a significant recovery in 2013 which was largely maintained into 2015. However in 2016, while the number of enterprise births in Kent is still greater than the number of deaths the ratio has fallen to its lowest level in four years.
In 2016 all Kent districts except one had enterprise birth to death ratios greater than 1.0, meaning that the number of enterprise births was greater than the number of enterprise deaths. Tunbridge Wells is the only district in Kent to see more enterprise deaths than new births.
Medw ay UA 1.16 1.31 1.05 1.03 1.15 0.83 0.94 1.22 1.07 1.62 1.39 1.43 1.36
A ratio less than 1 indicates that the number of deaths is greater than the number of births. Source: Business Demography Dataset, ONSPresented by: Research & Evaluation, Kent County Council
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
Medw ay UA 7,080 7,200 7,340 7,385 7,365 7,320 7,365 7,340 7,510 7,780 8,225 8,765 9,415 2,335 1.0% 650 7.4%
All numbers rounded individually.Source: Business Demography Dataset, ONSPresented by: Research & Evaluation, Kent County Council
Change2004-2016 Change 2015-2016
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Table 4 shows the change in the number of active enterprises (business stock) over the period 2004-2016.
The table shows that over the period 2004 to 2016, the growth in the number of active businesses in Great Britain was 31.8%. The equivalent figure for Kent was 24.6% and The South East as a whole 23.9% per annum. Within Kent all districts saw growth in the number of active enterprises since 2004. The highest growth can be seen in Dartford (+56.7%). Dover district saw the least growth (+15.6%).
Over the last year (2015-2016) there has been a high rate of growth in the number of active enterprises nationally (6.1%). The South East (+4.3%) and Kent (+5.2%) have both seen an increase in the number of active enterprises.
All areas of Kent have seen growth in the number of active enterprises over the last year. Ashford (+7.1%), Dartford (+9.0%), Gravesham (+7.8%), Swale (+6.4%) and Thanet (+7.0%) have seen growth above the national, regional and county average.
Chart 3: Active Enterprises 2004-2016
In terms of the total number of active businesses, there has been little change in each districts position relative to one another, with the exception of Dartford’s gradual improvement over the entire time-series relative to is nearest neighbours.
Table 5 shows the net gain in new enterprises. Overall Kent saw a net gain of 1,405 enterprises in 2016. This gain accounts for 2.1% of all active
Source: Office for National StatisticsPrepared by: Research & Evaluation, Kent County Council
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Part 2 – survival rates
Survival rate data looks at the annual survival rates for newly born businesses for the first 5 years of their existence. So, it is possible to look at survival rates for each of the first five years of a newly created business.
One year survival rates One year survival rates for newly formed businesses in Kent are presented in chart 5.
In 2016 one year business survival rates in Kent (90.8%) were higher than the national (89.7%) and the regional (90.6%) rates.
One year survival rates have fallen in all areas over the last two years.
Chart 5: 1 year business survival rates in Kent
Table 6 looks at one-year survival rates for businesses formed in each year 2004 to 2015, to show how the level of first-year survivors has changed over time.
Source: Office for National StatisticsPrepared by: Research & Evaluation, Kent County Council
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Table 6: First year survival rates of newly born enterprises
Chart 6 summarises 1-year survival rates for Great Britain, the South East and Kent. It shows that while survival rates have fallen over the last two years, Kent still maintains higher survival rates than the South East and Great Britain. Chart 6: 1 year survival rates in Great Britain, the South East and Kent
DISTRICT, COUNTIES AND UNITARY AUTHORITIES WITHIN REGION AND COUNTRY by BIRTHS OF UNITS IN 2004-2015 AND THEIR FIRST-YEAR SURVIVAL
Source: Office for National StatisticsPrepared by: Research & Evaluation, Kent County Council
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
Page 13
Chart 7 shows the range of one year survival rates in Kent. The chart shows that normally one year survival rates within Kent do not differ greatly between the highest and lowest survival rates. During 2011 and 2012 one year survival rates ranged anywhere between 67.0% and 95.3%, they settled somewhat in the following two years. Over the last year the proportion of enterprises born in 2015 that survived their first year of trading has fallen and the one year survival rates in Kent now range between 93.1% and 86%.
Chart 7
Three year survival rates Three year survival rates for businesses in Kent are presented in chart 8.
At 62.4% three year business survival rates in Kent are above the national rate (60.9%) but below the regional rate (63.2%).
The number of Kent enterprises surviving three years following their birth fell continuously between 2009 and 2013. In 2016 the 3 year survival rate increased to its highest level for six years. These enterprises would have been formed as the country was starting to recover from the recent recession.
Source: Office for National StatisticsPrepared by: Research & Evaluation, Kent County Council
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Chart 8: 3 year business survival rates in Kent
Table 7 looks at three-year survival rates for businesses formed in each year 2002 to 2013, to show how the level of three-year survivors has changed over time.
Table 7: Three year survival rates of newly born enterprises
Chart 9 summarises 3-year survival rates for Great Britain, the South East and Kent.
Medw ay UA 64.0 67.0 62.9 62.5 66.3 61.6 56.7 61.5 61.7 60.6 58.0 61.3
All numbers rounded individually.Source: Business Demography Dataset, ONSPresented by: Research & Evaluation, Kent County Council
Research & Evaluation, Business Intelligence, Kent County Council www.kent.gov.uk/research
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Chart 9: 3 year survival rates in Great Britain, the South East and Kent
Chart 10 shows the range of three year survival rates in Kent. Generally three year survival rates within Kent do not differ greatly between the highest and lowest survival rates. Rates have increased over the last four years in Kent although they have yet to return to their pre recession levels.
Chart 10: 3 year business survival rates in Kent
The following tables present the 1,2,3,4 and 5 year survival rates for businesses born between 2011 and 2015.