More companies open in Czechia, but growth is slowing

A new analysis shows that 13,900 companies were formed in Czechia last year. A report by the Czech Credit Bureau (CRIF) found that 1,500 fewer new businesses opened last year than in 2021 but 2,800 more than in 2020.

Real estate and commerce were among the fastest-growing sectors, and trade was the fastest disappearing. Prague led in the number of new companies and closures.

Uncertain economic conditions drove last year's drop, CRIF analyst Věra Kameníčková said. CRIF predicts that the cooling trend will continue into next year due to rising energy costs.

Prague leads in both new companies and closures

The largest number of new firms (13,950) was established in Prague. South Moravia had 3,445, and Moravia-Silesia had 2,186. The smallest increases occurred in the Karlovy Vary region (361) and Vysočina (508).

The capital leads the list of companies that folded, with 7,507 closures. South Moravia and Moravia-Silesia follow.

The net number of companies increased the most in Vysočina, where for every 10 defunct firms, 40 new ones opened. 

The Olomouc region came in second, followed by the Zlín and Pardubice regions. Ústí nad Labem was the only Czech region that experienced a net decrease in companies last year. Nine companies were created for every 10 that disappeared.

Real estate and commerce lead growth

Real estate management saw the fastest growth in 2022, with 5,185 new firms established. Commerce followed (4,663) and manufacturing (3,319) ranked third.

The trades saw the greatest number of closures. Some 4,546 ceased operations in 2022. In real estate management, 3,028 firms closed.

Agriculture recorded rapid growth. Sixty companies accounted for every 10 that disappeared.

While the number of new companies to form in the past few years was affected by the Covid-19 pandemic, that seems to have abated for now.

In 2023, though, companies will continue to face uncertainty from rising energy prices and inflation. This could make some entrepreneurs wary of launching new ventures, and also lead to some closures. The net growth of new companies is expected to remain slow.