Cyprus outperforms EU average in business stability

Cyprus recorded a 9.83 per cent enterprise birth rate and a 5.8 per cent business closure rate, positioning it moderately among EU countries for business growth and stability, according to a Eurostat study on business demographics for 2022.

The services sector in Cyprus led the way with 73,260 active enterprises employing a total of 298,410 people.

Meanwhile, construction followed with 10,000 enterprises and 37,520 employees, and industry contributed 5,410 enterprises with a workforce of 42,470.

Notably, the employment rate for new enterprises in Cyprus was 2.01 per cent, slightly below the EU average of 2.33 per cent. 

Across Europe, the study found that most countries saw more businesses opening than closing. 

However, there were exceptions in Bulgaria, Estonia, Ireland, Denmark, Poland, and Germany, where closures outpaced new ventures.  

As for the leaders in new enterprises, Lithuania topped the list with an 18.3 per cent rate, followed by Portugal at 16.7 per cent and Estonia at 16.6 per cent. In contrast, the lowest birth rates were reported in Austria (6.2 per cent), Denmark (7.4 per cent), and Italy (7.9 per cent).

“The birth of new enterprises is often seen as one of the key determinants of job creation and economic growth,” Eurostat pointed out. 

Estonia, Bulgaria, and Ireland posted the highest business closure rates at 25.1 per cent, 20.6 per cent, and 15.6 per cent, respectively.  

In comparison, Greece (3.1 per cent), Belgium (5.2 per cent), and Cyprus (5.8 per cent) reported the lowest.  

“Business births are considered to increase the competitiveness of a country’s business population, forcing them to become more efficient in the face of emerging competition,” according to the report. 

Furthermore, the EU’s economy was largely supported by its 26.2 million active enterprises in the services sector, 3.95 million in construction, and 2.45 million in industry.  

Services, in particular, accounted for 80.4 per cent of all enterprises, employing more than two-thirds of the total workforce, with shares ranging from 65.5 per cent in Slovakia to a substantial 87.6 per cent in Luxembourg. 

In contrast, while industry represented just 7.5 per cent of active enterprises, it nonetheless provided jobs for over 33 million people, corresponding to 21 per cent of the EU’s business economy employment.

In terms of size, industrial enterprises averaged 13 employees each, significantly larger than services, which averaged four employees, and construction, which had the smallest average of three. 

Cyprus, meanwhile, mirrored broader EU employment trends in new businesses with a 2.01 per cent rate, close to Europe’s 2.33 per cent average.  

In other EU countries, notably higher employment rates in new enterprises were observed in Greece (6.77 per cent) and Slovakia (4.62 per cent), while the lowest was posted in Finland (0.92 per cent), Germany (1.14 per cent), and Sweden (0.64 per cent).