IT industry hardest hit by Covid-19

The study, based on Office for National Statistics (ONS) and government data, shows that pre-pandemic, for every 100 businesses started in the IT sector, 91.51 failed.

The number of business collapses increased by 89% post-Covid-19, with 173.24 business failures for every 100 new ones.

A study by PricewaterhouseCoopers suggested struggles during and after the pandemic in the industry could have been caused by decreased overseas consumption and reduced supply of outsourcing due to worldwide restrictions. 

Finance and insurance was the industry second-worst affected by the pandemic. Pre-Covid-19, there were roughly 48.01 business failures for every 100 start-ups.

Post-pandemic, this number had increased by 50%, with an average of 71.95 failures for every 100 new companies.

The wholesale industry prospered post-pandemic when compared with the others studied. Pre-pandemic, for every 100 wholesale businesses started up, 101.5 businesses failed.

This figure decreased by 20% post-pandemic, where in the last eight business quarters 81.44 businesses failed for every 100 wholesale businesses started.  

Businesses in retail were found to be the next most successful in terms of the impact of the pandemic.

Pre-pandemic there were on average 79.75 business failures for every 100 business start-ups, and this number dropped 12% post-pandemic, with 69.94 businesses failing out of 100 since the second quarter of 2020. 

School of Marketing chief executive Ritchie Mehta said: “This data shows how much more difficult it has become to survive as a business since the pandemic.

“In the two years before the impact of Covid-19 more businesses were created than closed each quarter, but now the numbers of company births and deaths are basically equal. As entrepreneurs look to protect themselves against a harsher business environment, the value of skilled employees has never been higher.”