New business statistics indicate that up until the end of 2019, an increasing number of people in the United States were looking to start their own businesses.
This should come as no surprise, given the US economy’s strong performance in recent years and coupled with its relatively high rating of 91.6 out of 100 by the World Bank for ease of starting a business.
So then, how many new businesses start each year?
According to figures from the US Business Formation Statistics (BFS), the number of business applications in the US has been rising every year. This has been so since the start of the previous decade, just after the global financial crisis, during which the number of new business applications fell (by 3.9 percent in 2008 and 6.1 percent in 2009).
New business statistics show that in 2019, 3.48 million applications to start a business in the US were submitted. That’s a whopping 41.0 percent more than the number of applications received in 2010.
2019’s figures mark a fractional rise of just 0.16 percent from the previous year, which is the smallest year-over-year increase of the decade.
In comparison, the US government received 3.47 million new business applications in 2018—just over 5,600 fewer than in 2019—which is a 9.23 percent year-over-year increase and the largest of the decade.
New Business Statistics in 2020: Impact of COVID-19
The start of 2020 saw a slowdown in business formation in the US. New business statistics from the first quarter of 2020 show that there were a total of 842,614 applications.
Not only does this represent a 2.9 percent year-over-year fall from Q1 of 2019, but it is also the first decrease of first-quarter figures in years. This can be attributed to the economic uncertainty triggered by the coronavirus pandemic.
The US is currently facing falling consumption with many consumers prioritizing only essential purchases. Experts have also predicted that between 1.4 million and 2.1 million US businesses could be forced to close permanently as a result.
However, sentiment appears to be on the rebound as Q2 2020 saw 883,174 new business applications. That’s a 4.8 percent increase from Q1 and a two percent year-over-year increase.