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Czech Republic records lowest number of new businesses in 12 years

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The Czech Republic saw a decrease of 11 percent in entrepreneurship in the last quarter compared with the last year’s results. Only 14 000 Czech entrepreneurs established their own new businesses which is the lowest result in 12 years.

People were not exceptionally hopeful about the first quarter of the year because they did not expect the restrictions to be over. However, according to CRIF (Czech Credit Bureau), the number of closed businesses was also low.

“In the first quarter of this year, people had little hope for an early easing of anti-epidemic measures. At the same time, they assumed that existing entrepreneurs are experiencing the worst period since the beginning of the pandemic,” CRIF analyst Věra Kameníčková explained. She added that people don’t have any confidence in the current economic situation.

The interest occurred to be low because many existing businesses operate through insufficient financial resources. Banks are reluctant to give loans, yet occasionally, crowdfunding companies can help.

“In such a situation, people’s willingness to start a new business naturally declined,” Kameníčková said.

Most of the new businesses are in the fields of science, technology, and manufacturing, and were mostly established in Prague. On the other hand, the social and health sectors saw the lowest number of new companies.

As for the closing of businesses, only 5596 people ended their operations, which is the lowest number since 2010.

“When people leave their current business, they increasingly choose to interrupt their trade instead of canceling it. This allows them, in times of economic uncertainty, to have greater flexibility, and the opportunity to renew their trade in the event of an improved situation,” Kameníčková clarified. The number is also low compared to last year’s February, which is unexplained for now.

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