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Small businesses in decline in 8 regions of the country, due to population shrinkage

Politiko 2025-06-26 09:04:23

Small businesses in decline in 8 regions of the country, due to population

The country's economy appears to be following demographic trends with a higher concentration of small businesses towards large urban centers such as Tirana and Durrës and a contraction in other regions.

The number of businesses with 1 to 4 employees in Albania increased slightly in 2024 by only 1% compared to the previous year, but the distribution by region was declining in most of them in sync with population movements.

According to official INSTAT data, out of 12 regions of the country, in 8 of them the number of businesses with 1–4 employees has decreased. The reduction in 2024 was most pronounced in Korça with 312 fewer businesses or −5.21% compared to 2023. It is followed by Elbasan with minus 302 businesses or −4.07% and Gjirokastra with minus 48 businesses or a decrease of 2%.

Regions such as Shkodra, Dibra, Berat, Fier and Kukës recorded slight decreases ranging from −0.55% to −1%.

The capital continues to be the epicenter of economic activity. Tirana has added 1,489 small businesses in one year, marking an annual growth of 2.81%. This is the largest contribution to national growth and shows a continued concentration of economic development and entrepreneurship in the metropolitan area.

Durrës and Vlora also recorded growth. Durrës registered 286 more businesses (+2.46%), while Vlora registered 152 more (+1.55%). These data reinforce the trend of economic development from tourism in coastal areas.

Internal population movements and emigration abroad are reducing the consumer base and labor force in less developed regions.

Small businesses with 1–4 employees are an important indicator of economic and social vitality in communities, as they are predominantly family-run and closely linked to local demand. When these businesses grow, there is usually an increase in local consumption, population growth and economic optimism, the opposite happens when they decrease as there is usually a demographic contraction, a decline in economic activity, economic inactivity and social impoverishment.

According to INSTAT data, Tirana and Durrës are the only ones that have recorded significant population growth through internal migration, attracting the active part from regions such as Dibra, Kukës, Gjirokastra or Elbasan. This increase in the urban population directly affects the demand for services, and the increased need for small businesses in areas such as gastronomy, transport, technology and services for citizens./ Monitor