Dundee is outperforming all but two cities in the UK when it comes to the number of new businesses being launched despite an overall drop in the number of companies based in the city.
Research from chartered accountants UHY Hacker Young found that although Dundee lost 10 more businesses than were created in the city in 2009, this was still a better rate of business creation than almost anywhere else in the UK.
Dundee performed even better in 2008, with a net gain of 30 new businesses.
In 2009, Oxford and Aberdeen were the only two cities to create more businesses than they lost, with net gains of 15 and 50 businesses respectively. Edinburgh suffered a net loss of 50 businesses while Glasgow fared even worse, recording a net loss of 265 firms.
Across the UK as a whole, there was a net loss of 43,155 businesses in 2009.
“These figures reveal the true extent of the damage caused by the recession to the UK economy,” said Mark Waterman from UHY Hacker Young.
“Smaller businesses in particular had a torrid time with banks reluctant to lend to businesses with few assets.
“Banks are still reluctant to reassess the level of risk associated with lending to start-ups, making it very difficult for new businesses to access funding.”
Mr Waterman said more must be done to ensure entrepreneurs have access to credit.
“Those who were able to access finance were doing so despite some incredibly stringent conditions,” he said.
“Any bounce from the staycation was wiped out by the cancellation of business conferences, exhibitions and seminars that seaside towns would normally do very well from.
“In some cases, company directors were required to provide personal guarantees, such as their homes and cars, as part of the loan agreement.
“With 99% of the British economy made up of small to medium sized enterprises, it is imperative that the government ensures that small businesses receive the funding and support they require to avoid the economy falling back into recession.”
The research also found that seaside towns that rely on tourism fared the worse when it came to business creation.Seaside bustThe four lowest ranked towns were all seaside resorts Poole, Southend-on-Sea, Preston and Blackpool.
“Seaside towns have never recovered from the collapse of their traditional maritime and tourist industries,” said Mr Waterman.
“Whilst these towns have tried to diversify their economies from reliance on a dwindling tourist spend, that diversification has been a mixed success.
“Despite the hopeful idea of the ‘stay-cation’ the British tourist industry did not do well from the recession.
“Any bounce from the staycation was wiped out by the cancellation of business conferences, exhibitions and seminars that seaside towns would normally do very well from.
“Businesses, like consumers, reined in discretionary spending during the recession and those seaside towns who relied on their business suffered.”