Number of New Businesses Fell Last Year, Study Finds
Fewer new U.S. businesses were started last year, while the ones that did start employed more people, a private survey said Wednesday.
The number of start-up businesses fell 2.7% last year, to 151,016 after declining 7% to 155,141 in 1998, according to a survey by Dun & Bradstreet Corp. The new companies created 926,899 jobs, up 2.3% from the year before.
Start-ups may be hindered by the shortage of workers. Overall the economy created 2.7 million jobs last year, and a record 65% of the population works, Labor Department figures show. That makes it harder for potential entrepreneurs to find staff.
“With the U.S. economy continuing its record-setting expansion and with good jobs readily available, fewer individuals are going out to start up new ventures,” said David Kresge, chief economist at the credit information company.
Overall, 35 out of 50 states reported declines in new businesses last year.
The biggest increases in start-ups and employment were in California and the other Pacific states of Alaska, Hawaii, Oregon and Washington. In that region, 5.8% more new businesses were created last year. Those companies hired 11.5% more people.
Manufacturers were among those with fewer start-ups and increasing employment last year. New enterprises fell 5% to 11,292. Still, those companies created 114,248 jobs last year, up 3%.
Retailers and wholesalers had sharper declines in start-ups. They also created fewer new jobs.
New wholesalers fell 13% to 12,233. Retail start-ups fell 12% to 29,263. Jobs created by new retailers dropped 6% to 183,907; those for new wholesalers decreased by 4% to 67,802.
New mining companies showed the steepest drop in new business creation, with start-ups falling 21% to 467 last year. Employment fell 33% to 4,575.
Agriculture, forestry and fishing start-ups rose 12% to 2,732 last year. New jobs rose 10% to 11,090.
New transportation and utility companies had the largest increase in hiring, adding 70,284 workers last year, 17% more people than in 1998. New companies in that category rose 4.4% last year.
