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Fewer Business Failures

March 22, 1987|NANCY YOSHIHARA

Fewer California businesses had to close up shop last year while the number of new ventures was up, according to a newly released report on California business trends by Dun & Bradstreet.

The analysis showed business failures statewide decreased 1.3% in 1986 to 10,160. That compared to a 6.9% increase in business failures nationwide.

"The level of business failures in California as a whole has been slowly declining for the last three years, which reflects the overall stability and fundamental strength of the state's economy," said Joseph W. Duncan, corporate economist and chief statistician of Dun & Bradstreet. "Failures in the U.S. have been rising during the same period, up 9.9% in 1985 and 6.9% in 1986."

He added that the weaker dollar will have a positive effect on California's economy this year, particularly for the state's manufacturers.

Northern California had the best luck with business. Its failure rate was down 10.1% as all industry sectors, except manufacturing, posted declines.

In contrast, failures rose 1.8% in Southern California. Ventures in mining and oil and gas extraction businesses suffered the most, with the number of failures more than doubling from 1985.

Business starts in California rose 3.2% in 1986 to 29,851. The gains came in finance, insurance, real estate, services and retail.

Business start-ups in Los Angeles, San Francisco and San Diego were all up. The rate of the new ventures nationwide, however, was up only 0.7% to 251,597.

"The level of entrepreneurial activity has been healthy in California in recent years, although not as robust as the gains we've seen in some of the states in the northeastern U.S.," said Duncan.

Although construction activity was significantly stronger in the southern part of the state than the north, the value of building permits in California's 32 largest cities rose 4.5% in 1986. In contrast, the value of permits in 200 U.S. cities declined 2.2%.

Long Beach, Santa Ana, San Bernardino, Ontario, Orange, Pasadena and Santa Monica reported gains of 25% in the value of building permits, according to Dun & Bradstreet.

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