Fewer new businesses north of the Border

SCOTLAND’S business birth rate fell sharply in the second quarter of the year, according to new figures from the banking industry.

The number of start-ups opening accounts with the four main clearing banks dropped to 3,684 – down 15.6 per cent – from the first three months of this year. Compared to the same period in 2011, the number of people starting up their own business fell 7.6 per cent.

The figures from the Committee of Scottish Clearing Bankers (CSCB) appear to mirror the pattern of 2011, when start-up activity steadily dropped off throughout the year. The creation of 4,365 new businesses in the first quarter of 2012 broke that run, though the downward trend may now be returning.

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However, the figures may be failing to capture a shift in the market as newer entrants such as Santander and HSBC seek to capture more of Scotland’s business banking clients. The CSCB figures are based on Bank of Scotland, Clydesdale, Lloyds TSB and Royal Bank of Scotland branches.

Looking at the types of businesses formed, the number of “companies” being set up fell most dramatically, down by more than 17 per cent against the first quarter. The number of partnerships slumped by nearly 16 per cent, while the category of sole traders declined by more than 13 per cent.