MORE businesses are collapsing than being set up for the first time in Edinburgh since 2004, new figures have revealed, highlighting the ongoing struggle firms face in the challenging economic situation.
A long-term survey of business “births and deaths” found 115 more firms collapsed than were launched in 2010.
In contrast, prior to the banking crisis and recession there were up to 500 fewer firms folding than starting out.
The figures were revealed in the city council’s annual Edinburgh by Numbers report, a statistical overview of the city.
The Evening News today highlights the key issues of business and tourism in the Capital, following with living standards, education and social factors tomorrow.
The Federation of Small Businesses said the current emphasis on getting an enterprise off the ground did not extend to keeping it running, with firms struggling due to red tape and strict regulations.
Around 30 per cent of new firms collapse within three years, and less than half, 45 per cent, last more than five.
Gordon Henderson, development manager at the FSB, said upcoming changes to the Business Gateway contract – the group which helps launch new firms – would continue to help businesses several years on.
He said: “We’ve said for a long time there’s not enough support in the marketplace for regular trading businesses.
“There’s lot when you start up, and there’s a great deal if you’re a high-growth taking on hundreds of staff, but there’s a big void for those in between.”
Despite the difficulties faced by small businesses, the 20 top Edinburgh firms posted pre-tax profits of £4.5 billion, which translates to tax income for local and national government.
Graham Birse, policy director at the Edinburgh Chamber of Commerce, said: “These figures underline the importance of keeping and attracting major corporations to base their businesses in Edinburgh.”
In terms of jobs, Edinburgh City Council remains the largest employer, with 20,950 employees, followed by NHS Lothian with 19,600. Lloyds Banking Group has 11,700 workers, and RBS has 8570.
In tourism UK and overseas visitors together spent just over £1bn. Five million tourists descended on the city’s 23 annual festivals in 2011, including 2.6m to the Fringe.
The average tourist spent just under £80 a day and stayed between three and five nights.
Visitors from the US and Germany accounted for a quarter of all overseas tourists.
The National Galleries of Scotland was the most popular free attraction, with 1.3 million visitors, while Edinburgh Castle was the most popular paid-for attraction with 1.2m visitors.
The full report can be read at www.edinburgh.gov.uk/edinburghbynumbers