The number of Canberra businesses reached an all-time high in June last year, but an uncertain environment is also leading to the highest business closure rate in the country, according to the Canberra Business Chamber.
“Data published this week by the Australian Bureau of Statistics shows that we had 30,858 actively trading businesses at the end of the last financial year,” said Chamber CEO Graham Catt. “That’s the highest number we’ve ever seen in the city.”
Despite the impact of both Covid and the previous summer’s bushfires, local entrepreneurial spirit remains strong. Overall, the local business population grew by an extra net 800 firms compared to the previous year.
The growth is being lead by very small firms, according to the Chamber. “Almost all of that growth occurred in the micro- and small-sized business sector – those firms with less than 20 staff,” Mr Catt said. “The number of large firms actually declined, and today we have only three dozen private businesses which are regarded as large-scale employers – that is, organisations with more than 200 employees.”
“In effect, the ACT economy over time is becoming more and more reliant on very small enterprises for most of our job and wealth creation. Small business is big business, as far as the local economy is concerned.”
“In addition to focusing on small business, we still also face challenges in ensuring that our startup businesses can survive. The same data also shows that whilst the ACT still has the highest percentage of new startups of any state or territory, it’s accompanied by the highest business exit/closure rate nationally.”
The 2019-20 financial year saw almost 4,900 new firms commence, but around 4,100 closed in the same year.
“That’s a lot of startups, but also a lot of unnecessary failures. It represents a huge amount of lost money, energy and jobs. We need to get better at ensuring the long-term survival of businesses.”