1 December 2015
Article by Gareth Thomas, National Assembly for Wales Research Service
With the Plenary debate on small businesses on 2 December and Small Business Saturday coming up on 5 December, it is timely to look at the recent statistical trends relating to businesses across Wales. So, what does the data tell us about businesses in Wales, and how do these compare to other parts of the UK?
How many businesses are there across Wales, and how has this changed over time?
The Welsh Government’s Size Analysis of Businesses release provides detailed data on the number and type of businesses across different areas of Wales. The headline figures show that:
- In 2014 there were 231,110 businesses across Wales, of which 229,515 (99%) are SMEs employing less than 250 people.
- In total 1,058,500 people in Wales were employed by businesses, of which 654,200 (62%) are employed by SMEs.
- In 2014, businesses in Wales had an annual turnover of £116.6 billion, of which £41.8 billion (36%) was turnover of SMEs.
Looking specifically at SMEs in Wales, these have increased from 177,590 in 2004 to 229,515 in 2014. This is an increase of 29%. Over the same period, the number of SMEs across the UK has risen from 4,245,565 to 5,733,780. This is an increase of 35%.
- Over this period, the largest numerical growth in the number of SMEs was in Cardiff, which saw an increase of 8,445 businesses from 20,910 in 2004 to 29,355 in 2014.
- Bridgend saw the largest percentage increase of any Welsh local authority, a 79% increase in the number of SMEs between 2004 and 2014. This was from 5,225 to 9,375.
- There are 160 (2%) fewer SMEs in Ceredigion in 2014 than in 2004, the only local authority to see a decrease over this period.
What about new start-ups and business closures?
The Office for National Statistics (ONS) publishes data on this, and has recently released figures for 2014. In 2014, there were 11,345 business start-ups in Wales, and 8,490 business closures.
Given the different sizes of the various devolved nations and English regions, a useful way of comparing performance across the UK is by looking at the number of business start-ups per 10,000 people aged 16-64, using figures on Stats Wales. The graph below shows these for the UK nations from 2004 to 2014. It can be seen that:
- In 2014, there were 59 business start-ups in Wales per 10,000 people aged 16-64. This is lower than the UK average of 85 start-ups;
- The business start-up rates in all UK nations are higher than they were at the start of the economic downturn in 2008;
- In 2004, Scotland had the lowest rate of business start-ups per 10,000 people aged 16-64 of the UK nations. However, it now has a higher rate than both Wales and Northern Ireland.
Business start-up rate per 10,000 population aged 16-64
Looking in more detail at the data, in 2014 there are less business start-ups per 10,000 people aged 16-64 in Wales than in all 12 of the devolved nations and English regions except Northern Ireland and the North East of England.
What data is available for my constituency?
Neither of the publications mentioned above routinely include data on constituencies, however the ONS has produced some ad-hoc releases on business start-ups and closures by constituency. These include:
- Data on start-ups, closures and active businesses by Parliamentary Constituency in 2014;
- Business start-ups by Parliamentary Constituency from 2004 to 2013 (figures for current constituency boundaries are from 2010 onwards)The most detailed source of information at constituency level is contained in the ONS’ annual UK Business: Activity, Size and Location release. However, this presents data on VAT or PAYE-registered businesses. These do not include many of the micro-businesses across Wales, and the total figures are considerably lower than those in Size Analysis of Businesses.
However, some of the key points at constituency level from this data are:
- Brecon and Radnorshire also had the largest number of VAT or PAYE-registered SMEs of any Welsh constituency, at 4,490 in 2015, while Rhondda had the smallest number, at 1,090 SMEs; and
- Cardiff Central and Cardiff South and Penarth had the highest number of businesses employing 250+ people in 2015, 20 businesses in each constituency.