During the first quarter of 2024, the closure of companies in Colombia experienced a notable increase, while the pace of creation of new companies decreased significantly, according to the most recent study by Informa Colombia, a firm specialized in financial and commercial information. The period is the first in four years that shows a decrease in business creation in the country.
The precise report was published prior to the resumption of the first debate of the controversial labor reform project of the Government of Gustavo Petro, which is scheduled for June 11 in the Congress of the Republic and at a time where unemployment is 10 .6%, according to the National Administrative Department of Statistics (Dane).
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He himself points out that The economic situation was a determining factor in this negative dynamic: “The slowdown in economic activity is explained by the fall in investment in machinery and equipment, low levels of investment in civil works and a moderate reduction in private consumption; “The manufacturing, construction and commerce sectors presented negative trends.”
Likewise, it is specified that in the first quarter of 2024, Colombia registered the creation of 51,827 new companies, which represents a reduction of 30% compared to the same period in 2024, when 74,143 new companies were registered. In January 2024, 17,535 companies were created, in February 18,504 and in March 15,788. The data contrasts with January 2023, when 23,364 companies were created, in February 23,940 and in March 26,839.
Uncertainty in economic policy and economic behavior in 2023, according to the report, negatively affected the creation of new companies. “The behavior of the economy for the first quarter of 2024 was the most negative since the covid-19 pandemic, showing a growth of 0.7%,” he pointed out.
Despite attempts to improve international financial conditions, these were not enough to reverse the negative trend in business creation. The departments of Nariño and Putumayo stand out, where an increase in business creation of 38% and 28% was recorded, respectively.
Company closures, meanwhile, showed a notable fluctuation between the first quarter of 2021 and the same period in 2024. In 2022, a 23% increase in company closures was recorded compared to 2021, when a total of 27,960 closures, possibly due to the prolonged effects of the pandemic. In 2023, there was a 20% decrease, with 22,469 closures, but In 2024, closures increased again by 31%, reaching 29,453.
In geographical terms, Bogotá (7,040 closures), Antioquia (5,218) and Valle del Cauca (3,463) were the regions with the highest number of closureswhich significantly affected the national economy, especially in sectors such as commerce, accommodation and food services and in manufacturing industries.
Informa Colombia’s analysis highlights the complexity of the current panorama for the creation of new companies, in which It is attributed to various macroeconomic factors such as inflation (7.16% year-on-year in April 2024), the interest rate of the Bank of the Republic (current 11.75%) or the dollar (above $3,800).. “This panorama reflects a complex scenario for business creation,” the study points out.
The figures and conclusions of the Informa Colombia study make it clear that the adverse economic context has had a significant impact on entrepreneurship and business sustainability in Colombia, which marks a challenge for future efforts at economic stabilization and promotion of entrepreneurship.
