Marginally more businesses opening than closing in Derry new figures show

Derry and Strabane City Deal Projects and the expansion of Ulster University’s Magee Campus will contribute positively to the North West’s long term economic outlook according to the chief executive of Derry’s Chamber of Commerce. 

Speaking to The Derry News following Thursday’s publication of the Northern Ireland Business Demography Statistics 2023 by the Department for the Economy, Anna Doherty said sectors such as advanced manufacturing, AI, RegTech, and Green Tech, were poised to benefit “significantly”.

However, Ms Doherty also highlighted the challenges facing the region; in the short term, she said, business closures were “all but inevitable”.

The newly released business demography statistics revealed 370 new businesses opened in the Derry City and Strabane District Council area in 2023, and 355 closed.

While an overall increase of 15 businesses locally in 2023 is to be welcomed, there has actually been a steady and significant decline in the number of new businesses opening here in the last six years.

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Taking the number of business closures from the number of new businesses opening, there were 60 in 2022; 110 in 2021; 115 in 2020; 80 in 2019; 150 in 2018; 140 in 2017. 

Ms Doherty attributed the “pressures” on businesses in the North West to cost of doing business and covid, which she described as “crises”.

She added: “Increased supply chain costs, staffing challenges, and the highest energy rates in all of Europe, continue to be very challenging. 

While businesses in both Britain and the Republic of Ireland benefited from covid-era supports, businesses in Northern Ireland did not, meaning that the legacy of these challenges has lasted much longer here than elsewhere. 

“The upcoming increases to Employer National Insurance contributions and the National Living and Minimum Wage rates will add additional burdens to our businesses, especially in people-heavy industries such as retail and hospitality. 

“An competitive advantage that these industries may have had in a border region such as the North West will be wiped out when the Republic’s government introduces the 9% food based hospitality VAT rate it has pledged, which will leave hospitality businesses on this side of the border at a competitive disadvantage, paying 20% VAT and setting their prices accordingly. These circumstances make business closures in the short term all but inevitable,” said Ms Doherty.