The Importance of Small Business to Northern Ireland

Executive Summary

• There are over 132,500 businesses in the SME sector (defined as from sole operators to up to 249 employees) in Northern Ireland - most of whom are defined as sole operator businesses. However, over 35,000 of them have employees.
• All of the broad sectors of the private sector in Northern Ireland are at least 99% made up of SME firms in terms of the number of firms.
• The SME sector accounts for over 70% of turnover in the private sector in Northern Ireland, which is significantly more than for the UK as a whole, where the share of SME turnover in private sector turnover is around 50%, or for Wales or Scotland where the share of SME turnover in private sector turnover is around 60% and around 50% respectively.
• The SME sector accounts for just under 75% of all private sector employment in Northern Ireland, which is again significantly more than for the UK as an whole where the share of SME employment in the private sector is around 60%; in Scotland the share of SME employment in the private sector is around 63% to 64%; Wales is roughly comparable to Northern Ireland in terms of the SME share of private sector employment.
• The SMEs in the Wholesale and Retail Trade (including Repair of Motor Vehicles and Motorcycles) account for nearly 14% of all private sector employment in Northern Ireland. 
• Northern Ireland has a lower level of both business births and business deaths (registration and deregistration) than the other UK countries with 11.3% of registered businesses in 2017 being born and 8.2% dying; the UK business levels are 13.1% and 12.2% respectively.
• Since 2009, Northern Ireland has been persistently below the rest of the UK in terms of the net change in the number of business registrations.
• 5-year survival rates for new firms has been very variable of late but rarely goes over 50%.
• The balance of trade deficit trend of previous years has been reversed with a surplus of £10 million recorded.
• The number of exports and exporting firms in Northern Ireland has increased and the main trade destination for these products is the EU bloc.
• Northern Ireland firms involved in export are specialised providers with most firms exporting one product showing limited diversification and potential vulnerability.