Surge in U.S. Business Openings Signals Economic Recovery

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The United States has experienced a remarkable resurgence in business openings throughout the year, consistently surpassing pre-pandemic levels in 2019. This encouraging trend can be attributed to a surge in travel, events, and social gatherings, breathing new life into various sectors of the economy.

According to a recent report by Yelp, a prominent business directory platform, the number of new listings for shops and services is on track to exceed the record set in 2022, reflecting the nation’s rebound from pandemic-related setbacks.

Robust Business Growth

From January to July this year, Yelp recorded the emergence of nearly 484,000 new businesses on its platform. This impressive figure marks a substantial increase compared to the approximately 389,000 new businesses during the same period last year, constituting a year-over-year growth of approximately 25%. Moreover, it represents a striking 46% surge compared to the corresponding period in 2019, indicating not just recovery but robust expansion.

The surge in business openings has been observed across all categories, with various sectors driving this positive trend. Notable contributors to this growth include:

  • Hotels and Travel: This sector has witnessed a remarkable 39% increase in new business openings compared to 2022.
  • Home Services: With a 37% increase, the home services sector has played a pivotal role in the resurgence.
  • Auto: New auto-related businesses saw a 27% rise, reflecting increased mobility and transportation needs.
  • Event Services: As social gatherings and events make a comeback, event services have experienced a 27% growth in new businesses.
  • Local Services: Local businesses have seen a 23% increase, indicating the vitality of community-based services.

Notable Growth Areas in Travel

Within the travel sector, specific segments have exhibited notable growth compared to the previous year. These include:

  • RV Rentals: This category experienced an impressive 84% surge in new businesses.
  • Travel Agents: Travel agents saw a remarkable 76% increase.
  • Vacation Rentals: The vacation rental sector recorded a substantial 54% growth.
  • Airport Shuttles: New airport shuttle services increased by 30%.
  • Walking Tours: This segment experienced a 15% uptick.

Regional Insights

Geographically, several states have stood out in terms of new business openings:

  • California: California led the way, witnessing a significant influx of new businesses.
  • Florida: Florida secured the second spot, overtaking Texas this year.
  • Texas: Despite being overtaken by Florida, Texas continued to rank among the top states for new business openings.

Additionally, states along the East Coast demonstrated the most significant percentage growth in new business openings compared to the same period last year. Notable states in this category include Rhode Island (46% growth), West Virginia (46% growth), Delaware (45% growth), and Vermont (38% growth).

Inclusivity and Economic Optimism

Encouragingly, the resurgence in business openings has been accompanied by greater inclusivity. Every month this year has seen more business openings from underrepresented communities compared to the same month in the previous year. Notable increases include:

  • LGBTQ-Owned Businesses: An impressive 33% increase.
  • Black-Owned Businesses: A robust 28% growth.
  • Latin-Owned Businesses: A notable 28% surge.

Women-owned businesses saw a respectable increase of 19%, while Asian-owned businesses also experienced a 13% upswing.

Future Outlook

As the U.S. economy continues its recovery and reasons for economic optimism multiply, the upward trajectory in business openings is a promising sign. However, it remains essential to monitor how long this optimism persists, particularly as banking conditions tighten for small businesses. The dynamic nature of the business landscape demands vigilance and adaptability.

It’s worth noting that Yelp’s data is based on new business listings on its platform, which can be contributed by business owners and users. Additionally, data reporting and verification may introduce some lag in tracking the real-time emergence of businesses. Nevertheless, these trends underscore the resilience of the U.S. economy and its capacity for growth even in challenging times.