The Committee of Scottish Clearing Bankers new business statistics were published today for the second quarter 2012. This series records new business start-ups based in Scotland that have opened accounts with any of the four Scottish Clearing Banks. It is a valuable series because it should be expected that the creation of new firms would move in line with overall economic performance and GDP in particular.
Compared with the first quarter - see my earlier blog here - where there was some pick up in new starts, the numbers starting new firms fell again. See the chart below.
There is just no evidence of a recovery.
Using the moving average series, which smoothes the non-seasonally adjusted actual data, the number of starts is 44 percent below the pre-recession peak. Alternatively, the latest numbers are 31 percent below the average quarterly starts in the period before the recession started.
Is this, again, simply another indicator of severe demand deficiency in the Scottish economy?
Or, are we now in a world of permanently lower firm formation compared to the early to mid 2000s.
Whatever happened to Scottish entrepreneurship?