Thousands of Derbyshire businesses closed last year

Business leadership group the Institute of Directors said that, while businesses open and close all the time, the uncertainty caused by the coronavirus pandemic "complicated" the business landscape across the country.

Office for National Statistics figures show 2,845 business closed in 2021 – up from 2,550 in 2020. It was also up from 2,745 in 2019, before the coronavirus pandemic hit. Nationally, 327,000 businesses closed in 2021 – a 9% increase on the year before and the highest number since 2017.

Kitty Ussher, chief economist at the IoD, said businesses are constantly opening and closing, particularly sole traders undertaking casual work – including delivery couriers, which saw a boom during the pandemic – and self-employed people conducting freelance work. These are included in the official statistics and are more likely to be created or closed in a short period of time, Ms Ussher added.

The transport, storage and postal industry had the highest business birth rate, at 26%, and death rate, at 22%. No other industry had a rate for either higher than 16%.

Ms Ussher said: "The picture is then complicated by the impact of the pandemic, which not only led to a temporary increase in unemployment and so increased the number of people looking for freelance work, but also caused a change in consumer spending patterns that affected different parts of the economy in different ways. All of this led to particularly high churn rates as the economy adjusted in 2021."

Ms Ussher highlighted the rise in business births in 2021, suggesting this shows the economy is beginning to recover from the pandemic. Across the country, 360,000 businesses began trading last year – a 9% increase on the 333,000 the year before and the highest since 2016. Of these, 3,335 were in Derbyshire.

It meant a total of 30,535 businesses were active in the area in 2021 – up from 29,800 the year before. The IoD said the majority of new and closed businesses were sole traders – of the 327,000 total business deaths in the UK last year, just 82,000 had two or more employees.