The bi-annual report explores the pace and strength of entrepreneurial activity across regions of the UK, using data to measure start-ups, growth and share sales, finding the proportion of high-growth companies in the UK also rose by 30% in the year to March 2013.
The proportion of high-growth companies in the UK also increased by 30% with particularly steep rises seen in Wales (66% rise), the Midlands (54%) and North West (44%).
In terms of start-ups, London still reigns, with the highest number of new businesses registered in 2013 – 136,939, compared to 16,281 in Birmingham and 11,765 in Manchester, its two nearest rivals.
Richard Phelps, Managing Director, Barclays Wealth and Investment Management, said: “The findings in this edition of the Entrepreneurs Index confirm that the UK economic recovery is gathering pace, especially as the number of active companies has grown by 3% or more in each six-month period since the middle of 2012.
The old economy reborn
The report also shows that the biggest proportionate increases in high-growth companies have been in more traditional sectors, such as construction (55% rise in the proportion of high-growth companies), manufacturing (47%) and transport (37%). Experts consulted on these findings cite large Government and infrastructure projects, including the Help to Buy Scheme and Crossrail in sparking activity in these cyclical sectors.
Entrepreneurs holding on to equity
The Entrepreneurs Index also looks at share sales as an indicator of liquidity moments and wealth creation. The findings revealed that fewer shares in active, growing companies with revenues of between £2.5m and £100m in the UK were sold in 2013.
In the first half of 2013, the number of companies with share sales fell by 11.2% (809 companies) compared to the same period in 2012, while in the second half of 2013, the year-on-year drop was 16.4% (1,109 companies) .
Richard Phelps added: “The drop in the level of share sales is surprising, especially given that all other indicators point to a buoyant and fast-growing entrepreneurial sector. However, those same indicators and the overall strength of the UK economy could help us to find the answer; anecdotally we know that some entrepreneurs held off selling their businesses in early 2013, confident that the rate of growth of their companies would result in better offers at a later date.
On this basis, and as evidenced by recent transactions (including listings on AIM ), we wouldn’t be surprised to see the trend in declining share sales could be reversed in 2014.”