What can business data tell us about the market share of large firms?
Using existing business microdata, the ONS has today published new statistics on industry concentration, which measures the extent to which industries are dominated by a small number of large firms. Concentration is one indicator used to assess competition, alongside measures of business dynamism and price markups. In this blog, Sumit Dey-Chowdhury explains how the new statistics add to our understanding of productivity, business dynamism and market power.
What concentration tells us
Industry concentration describes the extent to which a small number of firms account for a large share of an industry’s turnover. One measure is the combined share generated by its five largest firms (the ‘five-firm concentration ratio’). Economists consider concentration alongside indicators of market power to examine competition and changes in the structure of markets.
Concentration alone cannot provide a definitive answer to how competitive an industry is. Production technology can also affect concentration, and firms within the same industry may serve different product or geographical markets. We therefore need to consider concentration alongside other evidence, including business dynamism and firms’ price markups.
Our results show that average concentration across the non-financial business economy was lower in 2025 than in 2010. Giving greater weight to industries with higher turnover, the average five-firm concentration ratio fell from 0.45 to 0.38. The largest decline occurred between 2014 and 2017.
Getting more from existing data
Our headline results use the Inter-Departmental Business Register (IDBR), with estimates from the Annual Business Survey (ABS) available in the accompanying data pack. Using such existing records allows us to produce additional insights without collecting new data. Providing estimates from both sources also creates opportunities for further comparisons and quality.
Industry concentration adds another perspective to our established statistics on the business economy. Our firm-level productivity statistics measure output per worker, while business dynamism examines job creation and destruction as firms enter the market, expand, contract and exit. Together with concentration, these measures help us examine different aspects of economic structure and change.
Our wider work involves linking records over time and across sources. The Longitudinal Business Database follows businesses recorded on the register over time, supporting analysis of employment growth and decline. Linking payroll information to employers through our linked employer-employee data will allow us to measure workers’ movements between businesses and provide more timely insights into labour market dynamics through high-frequency payroll data.
Further insights
We plan to publish new linked employer-employee statistics on hiring, departures from payrolled employment and movements between employers later this year. They will complement measures of businesses’ employment growth and decline by capturing worker movements, including replacement hiring that does not change a firm’s total workforce.
Our annual Trends in UK business dynamism and productivity bulletin, due in December 2026, will provide further insights into productivity, business dynamism and business markup estimates.
Sumit Dey-Chowdhury is Deputy Chief Economist at the Office for National Statistics.