Latest Bank of Ireland Barometer Indicates fall in entrepreneurial activity

Highlights:

• 14% decrease in new limited companies formed in the second quarter 2008
• 4,082 new limited companies formed in Q2, 2008; 8,191 new companies formed this year
• Dublin remains the prime location for Irish businesses
• Growth in Dublin's satellite towns continues, with Louth leading the way

Bank of Ireland Business Banking today (9 July 2008) issued its latest Business Start-up Barometer that tracks the number of business start-ups in Ireland. The Barometer shows that, despite the recent slowdown in the economy, 4,082 new businesses have been established in the last quarter. While this figure represents a 14% decrease in new limited companies formed compared to this time last year (4,765), the rate of decline is slowing. The number of start-up companies in Q1 this year (4,109) was 22% less than Q1 in 2007 (5,276). These figures suggest that the number of new companies being set up has improved somewhat, rather than declined further.

Much of the decrease has been the result of the significant and expected downturn in the Construction sector, which fell by 10% this quarter compared to Q1 (260 companies were set up in the Construction sector in Q2 versus 304 companies in Q1). This represents a 45% decrease compared to the same period in 2007.

The Barometer also identified a decrease of 32% in the number of accounting, bookkeeping and auditing businesses set up this quarter (38 companies were set up in Q2 versus 56 companies in Q1). However, the number of companies set up within the software and consultancy sector has increased. 126 software and consultancy businesses were established this quarter, a 5% increase compared to Q1.

Dublin remains the prime location for Irish businesses with 1,777 new businesses established in the capital in the last quarter (1,739 in Q2 2007, an increase of 2%). Consistent with 2007 figures, the Barometer indicates that the growth in Dublin's satellite towns is set to continue. The number of businesses established in Louth in the last quarter has increased by 145% compared with the same time last year (118 companies versus 48), while the number of businesses set up in Wicklow and Meath have increased by 65% (106 companies versus 52) and 63% (160 companies versus 98) respectively. County Clare is also attracting an increasing number of entrepreneurs with the number of new businesses in the county growing by 73% this quarter (90 companies), compared to this time last year (52 companies). Cork and Galway continue to make up the remaining top three locations for start-ups.

Damian Young, Head of Small Business, Bank of Ireland Business Banking said: "The findings of the Barometer indicate that the recent economic climate has posed significant challenges to Irish start-up businesses this year. However, the continued diversification of start-ups into other sectors demonstrates the ability of Irish entrepreneurs to adapt to a changing economic environment and their agility in overcoming current challenges in the small business environment.

"While there has been a positive improvement in the number of start-ups this quarter, there continues to be significant challenges in the market place. Key to the success of these new businesses and indeed existing/growing businesses will be their ability to adapt to the changing economic environment. History has shown the resilience of small businesses in similar challenging times and this is down to business owners being responsive to market changes", added Damian Young.

Ends

Contact:
Anne Mathews
Media Relations Manager
Group Corporate Communications
Bank of Ireland
Tel: 00353 1 604 3836 / 00353 87 246 0358

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