The number of Canberra businesses reached a record high in 2021, but in an uncertain economic environment, the ACT also recorded the highest business closure rate in the country, the Canberra Business Chamber said today.
“New data from the Australian Bureau of Statistics shows that we had 33,918 actively trading businesses at the end of the last financial year,” said Chamber CEO Graham Catt. “That’s a 7.7 per cent increase – up from 31,499 the previous year and the highest number we’ve ever seen in this city.”
Despite the impact of Covid, lockdowns, inflation and a massive workforce and skills shortage, local entrepreneurial spirit has been strong. Overall, the local business population grew by a net 2400 over the previous year.
The growth continues to be led by small business. “Almost all of it occurs in the micro and small business sector – those with less than 20 and in many cases no staff,” Mr Catt said.
“With 63 per cent of Canberra’s jobs now in the private sector, the ACT economy is becoming more and more reliant on small enterprises for our job and wealth creation. Small business is big business, as far as the local economy is concerned, and we want as many of them as possible to grow into bigger businesses,” he said.
“But we must do more to ensure that new businesses survive. The latest data tells us that whilst the ACT still has the highest percentage of new startups in any state or territory, it also has the highest business exit/closure rate nationally.”
In the 2021-2022 financial year, 6,700 new enterprises started, but over 4,400 closed. And after five years, only 62.5 per cent of ACT businesses were still operating, the lowest rate of any state or territory.
“It is exciting to see a lot of start-ups, but these closures represent a huge amount of lost money, energy, and jobs. The message is clear – that the ACT needs to get much better at supporting small businesses to ensure their long-term survival,” Mr Catt said.
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