Fewer fast-growing businesses as pandemic hits entrepreneurs

The coronavirus pandemic has had a dampening effect on business growth, according to new figures from the statistics agency CBS.

The number of fast-growing businesses, defined as one where the number of employees grows by at least 10% for three years in a row, declined by 17% in 2020.

In total 9,900 businesses qualified as fast-growing under the CBS’s definition, which includes takeovers but not mergers. That compares to 11,800 the previous year and is the lowest total since 2016. Companies must have at least 10 staff in the first year to be included.

The problem was particularly acute in the hotel and catering sector, where 40% fewer companies grew rapidly in a year when trade was hard hit by lockdown closures.

Small companies with less than 50 people on the payroll were most likely to grow during the pandemic, while software developers and childcare facilities were the only sectors which had more fast-growing companies in 2020 than the year before. IT support companies were also in high demand as a result of people working from home.