NEW business ventures in Gwent have seen a far less dramatic reduction than the rest of Wales compared with last year.

Tony Mansell, Barclays head of local business in Newport, said the reduction was expected, given a general slowdown in the economy, the impact of the foot-and-mouth outbreak in Wales and the events of September 11.

"But it is important to retain a long-term view, and we believe that signs are quite encouraging, especially when considering Newport and its surrounding area saw only a 7% year-on-year reduction in business start-ups compared to a 19% reduction across the whole of Wales.

"A steady upturn in GDP growth in 2002 is likely, and this will assist recovery and create a more attractive climate for starts this year." Barclays still helps over 240 customers a day start up in business and is committed to supporting and creating new business opportunities.

While UK business start-ups totalled 342,000 in 2001, down 15% on the previous year, the small business picture is not as bad as it might seem.

In the final quarter of 2001, 79,300 new businesses started, nearly 6% fewer than in the same quarter in 2000.

Despite these less than rosy figures, seasonally adjusted data shows the closing months of 2001 to have been encouraging with an upturn in start-up activity evident. A sharp drop in starts in the first half of 2001 was largely responsible for the dramatic nature of the 2001 figures.

The 6% drop in the last quarter of 2001 compared to 2000 can be seen in a positive light, since it represents a marked improvement on the 27% drop in the third quarter. Business closures in the last three months of 2001 were, at 109,000, up 10% on the fourth quarter of 2000. Over the course of 2001, 410,000 businesses closed their doors for the last time, an increase of 4% on the number of businesses that ceased trading in the year 2000.

However, these figures reveal that one-third fewer businesses are closing than during the recession years of 1991 and 1992.

Despite these figures, the UK economy is relatively well placed to withstand the effects of slower global growth, with Barclays economists predicting UK GDP growth of around 2.2% during 2002.

This growth should allow businesses to raise their margins a little, ensuring that recovery is not profitless. Taken together, these factors should create a more attractive climate for starts in 2002.

Many industrial sectors were in line with the national average rate of starts (down 16%). Significant exceptions were:

Property/finance (down 29%), probably as a result of the depressed stock market Hotels/catering (down 25%), a major casualty of the foot-and-mouth outbreak and the post September 11 decline in visitors to the UK Business & professional services (down 36%) hit hard by the general slowdown in growth in London and the South East.

Construction, community and personal services have been less hard hit with activity in these sectors stabilising. Higher public spending and the strong housing market will have helped achieve this.