Business Starts Decline for 7th Quarter in Row : Maturing Growth, Shift to Export Markets Cited
U.S. business starts, a barometer of economic activity and money-making opportunities, declined in the first three months of the year for the seventh straight quarterly drop, Dun & Bradstreet Corp. reported Monday.
The leading business information marketing company said the number of new domestic businesses dropped 6.6% to 53,382 from 57,158 in the first quarter of 1987.
It attributed the decline largely to the maturing age of the nation’s economic expansion, now in its sixth year, as well as a shift from consumerism to export-driven growth.
Joseph W. Duncan, Dun & Bradstreet’s corporate economist, said new retailing businesses fell because of expectations that consumer demand will weaken, while new service businesses fell in response to increased competition and corporate budget reductions.
Retailing and service companies account for about half of all new businesses.
“While the current surge in U.S. exports will create new business opportunities in some sectors, existing manufacturers are the primary beneficiaries,” Duncan said in a report of the latest figures.
Data compiled by Dun & Bradstreet showed first-quarter business starts fell in seven of the nine major industry sectors. The largest decrease came in the finance-insurance-real estate category, which fell 9.8%. Retail business starts dropped 8.1% and services fell 5.7%.
Starts also fell in the construction, manufacturing, wholesale and transportation sectors, with decreases of between 5% and 8%.
The only two categories with increases were in agriculture, up 11.5%, and mining, up 2.3%.
“Both mining, which includes oil and gas extraction businesses, and agriculture appear to be turning the corner after several years of severe stress,” Duncan said.
A Dampening Effect
Despite a drop in manufacturing-related business starts, there was evidence that export growth was encouraging some entrepreneurs, Duncan said. An analysis of manufacturing starts showed significant increases among motor vehicle and equipment makers, metal producers and office equipment manufacturers.
BUSINESS STARTS Here is Dun & Bradstreet’s breakdown of the number of new businesses started in the United States during the first quarter, including the percentage change from the first three months of 1987.
Starts % Chg. Pacific Oregon 683 26.5 Hawaii 248 18.7 California 6,897 -5.4 Washington 1,134 -10.0 Alaska 110 -15.4 Mountain Nevada 302 9.0 Arizona 942 -8.5 New Mexico 265 -12.0 Idaho 150 -19.4 Colorado 958 -20.4 Wyoming 81 -25.0 Montana 134 -27.6 Utah 313 -28.4 New England Rhode Island 238 9.2 Maine 240 5.7 Massachusetts 1,350 3.6 Connecticut 901 -4.5 New Hampshire 260 -13.6 Vermont 102 -22.7 Middle Atlantic Pennsylvania 2,522 -3.8 New Jersey 2,178 -10.5 New York 3,992 -17.7 East North Central Illinois 2,452 3.5 Ohio 1,978 0.5 Indiana 871 -6.2 Michigan 1,657 -10.1 Wisconsin 710 -13.2 West North Central Iowa 398 -6.6 Missouri 941 -6.6 Kansas 515 -7.2 Minnesota 666 -15.4 South Dakota 88 -23.5 Nebraska 214 -27.7 North Dakota 77 -29.4 South Atlantic Delaware 185 16.4 South Carolina 704 0.1 Florida 3,669 0 Virginia 1,293 -1.1 North Carolina 1,196 -2.7 Georgia 1,641 -5.5 Washington 215 -6.9 Maryland 1,237 -11.6 West Virginia 257 -20.4 East South Central Tennessee 1,028 1.5 Mississippi 396 -7.0 Kentucky 650 -11.3 Alabama 663 -13.0 West South Central Louisiana 816 1.5 Oklahoma 574 -3.9 Arkansas 414 -5.9 Texas 3,877 -8.1
Source: Associated Press
