U.S. Business Numbers Grow During Staled Economy

 

Oct. 19, 2004--In the past five years, the U.S. economy has experienced both extremes of the business cycle--the Internet bubble peak followed by the prolonged recession trough. During that time, however, even as the total number of U.S. jobs decreased and the economy stagnated, the number of U.S. businesses grew by 17.4% from 1998 to 2003, according to data released today by infoUSA, a compiler of business databases based in Omaha.

The number of "business establishments" was counted by infoUSA at the end of each calendar year and included any small, medium, or large business, division, brand, organization, association, or government with a phone line and paid employees.

In 1998, there were 10.9 million businesses establishments. For the next five years, businesses grew at an average annual rate of 3.3% to 12.8 million by 2003, though 2003 did experience a flat to a slight decline in business numbers versus 2002.

According to Giovani Coratolo, Director of Small Business Policy at the U.S. Chamber of Commerce, two factors for sustained growth in businesses, even during the recession, are a more favorable tax structure and that more individuals see entrepreneurship as a viable alternative to working for large companies.

"We have found growth of small businesses to be based on the tax code," said Coratolo. "More people ae willing to take the plunge when businesses taxes encourage investment. Another factor [in growth of businesses] is the increase in the number of the self-employed. Because big business condensed its workforce, many people that were laid-off began to look to entrepreneurship instead of large businesses for work."

States in the West and South experienced the highest growth in business establishments, with seven of the top 10 states coming from those regions.

The top five fastest growing states are: Nevada (48%), Delaware (29.5%), Florida (29.5%, Arizona (25%), and Georgia (24.5%). The lowest five are: Rhode Island (5%), Illinois (8.5%), West Virginia (9.2%), New York (9.3%), and Massachusetts (10%).

In total numbers of establishment California lead the way with 279,053, followed by Florida (183,475), Texas (162,699), Georgia (71,006), and North Carolina (70,543).