New businesses opening in Redbridge despite economic gloom
Redbridge continues to attract businesses but struggles to sustain them as people are taking risks in a recession hit economy, according to the latest official figures.
Business openings increased year on year from 1,420 starting up in 2008, to 1,770 in 2011.
In 2009, Redbridge was the only London borough, alongside Harrow, to have more businesses open than the previous year with 4.58 per cent more enterprises setting.
The number of companies closing each year is decreasing, but the statistics put Redbridge 16th out of the 33 London boroughs for business closures, figures from the Office for National Statistics show.
Geoff Hill, chairman of the Redbridge Chamber of Commerce, explained the correlation between the figures.
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He said: “I think Redbridge is an enterprising borough and the businesses of Redbridge have taken the recession as a bit of challenge.
“While the recession is a terrible thing, it gives the opportunity for people to break into business. Because of the way people in Redbridge are starting ventures, there are risks attached, and some of those are going to fail.”
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The number of business surviving after their first year has dropped from 97.4 per cent in 2007 to 86.2 per cent in 2010, according to the figures.
Only 34.4 per cent of businesses that opened in 2006 lasted five years.
Khalid Hussain, chairman of the South Ilford Business Association, said that the continuing recession has a big effect.
He said: “Wages haven’t gone up but prices have. That gap is where small businesses are suffering because people don’t have the buying power.
“First year businesses may survive out of their own pocket but how long can they continue if people aren’t spending?”
But Ian Wicks, development manager at the Essex Federation of Small Businesses, told the Recorder the numbers demonstrate a “robust economy”.
He said: “You are starting from an absolutely staggering figure. Given that the economy essentially collapsed, to retain 86 per cent is still going very strong.
“But a 10 per cent drop is concerning and the failure rate is going to increase. It could be due to lack of support from the council, businesses merging, and people retiring.”