Sixty thousand business start-ups in one year

Embargoed until 10:45am – 26 March 2008

Sixty thousand business start-ups in one year

Sixty thousand businesses started operation in the February 2007 year, Statistics New Zealand said today.

These new businesses represent 13 percent of the total number of businesses (463,000) in New Zealand at February 2007. In the same year, it is preliminarily estimated that 54,000 businesses ceased operation.

The new businesses are predominantly non-employers (86 percent) or had between 1 to 5 paid employees (12 percent). In total, the new businesses had 31,000 paid employees, approximately 1.5 percent of the total number of paid employees for all businesses. The property and business services industry was the largest category, with 43 percent of new businesses in this industry. The second largest category was the construction industry (12 percent).

The businesses that ceased operation displayed similar size and industry characteristics when compared with the new businesses. In total, the ceased businesses had 23,000 paid employees (about 1 percent of total paid employees).

Analysis of business start-ups from prior years shows that of the 63,000 new businesses in the February 2006 year, 51,000 (82 percent) were still operating the following year, while the remaining 12,000 (18 percent) ceased operation within 12 months. A similar ratio appears for surviving new businesses (that continue operation for at least one year) each year from 2001 to 2006.

Of the 43,000 new businesses that first started operation in 2001, 79 percent were still operating in 2002, 57 percent in 2004, and 40 percent were still operating in 2007. Non-employing new businesses from 2001 had a significantly lower proportion surviving the six years compared with businesses that had paid employees.

This is the first official publication of a new business demography dynamic statistics series based on a recently developed statistical resource, the Longitudinal Business Frame. The series includes a new range of statistical measures, including counts of the births and deaths of businesses and analysis of the survival rates of new businesses. To enable trends to be studied, the series has been backcast to February 2001 and released on a provisional basis. Business demographic structural statistics for 2007 were published on 26 February 2008.

Geoff Bascand
Government Statistician
26 March 2008

ENDS

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