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Demography of Enterprises 2014: exit rate of companies increases to 20.7%, the highest figure since 2008

September 14, 2016 04h12 PM | Last Updated: November 23, 2017 01h18 PM

Demography of Enterprises 2014: exit rate of companies increases to 20.7%, the highest figure since 2008

Between 2013 and 2014, the exit rate of enterprises (ratio between the number of firms closed and the total) increased by 6.1 percentage points, with a change from 14.6% to 20.7%, the highest rate in the series which started in 2008. That figure corresponds to a total 944.0 thousand firms leaving the market.

On the other hand, the entry rate (ratio between the number of entrances and the total) fell from 18.3% in 2013 to 15.9% in 2014, the lowest figure since 2008. A total 726.3 thousand enterprises started their activities in 2014. The survival rate (ratio between the number of surviving firms and the total) was 84.1%, also the highest rate in the series, representing, however, a total 3.8 million surviving companies, fewer than in 2013.

For the first time, the balance was negative, with a decrease of 4.6% in the number of enterprises (minus 217.7 thousand ones) between 2013 and 2014. Despite this decrease, total salaried occupations increased 0.5% (170.4 thousand) in the period. Entering firms accounted for 847.1 thousand new job posts in the period, out of which 29.9% (252.9 thousand) were created in trade, the activity which recorded the biggest number of decreases in salaried persons (134.7 thousand).

In 2014, 39.6% of the 694.5 thousand companies created in 2009 were still in the market, that is, five years after their birth, more than 60% of the companies had not survived. In this period, the sections of activities which recorded the highest survival rates were human health and social services (55.3%), real estate activities (51.5%) and professional, scientific and technical activities (47.3%).

From the total active enterprises in 2014 (4.6 million), 0.7% (31.2 thousand) were high-growth ones, and recorded an average increase of salaried employed persons above 20% a year, for a period of three years, with at least 10 employed persons in the beginning of the first year analyzed. In relation to companies with 10 or more employed persons (488.8 thousand), they represented 6.4%. These companies employed 15.4% (4.5 million) of the salaried persons in companies with 10 or more employed persons, and administrative activities and complementary services (28.3%) recorded a biggest proportion of salaries in high growth companies.

These are some of the results of the study Demography of Enterprises 2014, which, according to information from the Central Registry of Enterprises – CEMPRE, allows us to analyze the difference between entry, exit, re-entry and survival indicators of companies in the market, salaried employed persons, statistics of high-growth enterprises and gazelle companies (high-growth enterprises active for up to eight years in the year of reference) besides indicators relative to the local branches of enterprises and their activities. See the complete publication below.

Entry rate falls 2.4 percentage points in 2014

In 2014, 726.3 thousand enterprises entered the market, in a universe formed by 4.6 milion active firms, which represents an entry rate of 15.9%, the smallest in the series. In relation to 2013 (18.3%), this rate fell 2.4 percentage points (pp). On the other hand, the exit rate increased from 14.6% (695.7 thousand) to 20.7% (944.0 thousand), the biggest figure in the series, with 6.1 pp of increase.

As a result, for the first time since the beginning of the study, the balance of total enterprises was negative, with a decrease of 4.6% in the number of enterprises (minus 217.7 thousand ones).

Number of enterprises and their respective rates,
by type of demographic event - Brazil - 2008-2014
Year
Types of demographic events
Active
Surviving
Entries
Exits
Total
Rates
(%)
Total
Rates
(%)
Total
Rates
(%)
Number of enterprises
2008
4 077 662
3 188 176
78.2
889 486
21.8
719 915
17.7
2009
4 268 930
3 322 254
77.8
946 676
22.2
755 154
17.7
2010
4 530 583
3 531 460
77.9
999 123
22.1
736 428
16.3
2011
4 538 347
3 666 543
80.8
871 804
19.2
864 035
19.0
2012
4 598 919
3 738 927
81.3
859 992
18.7
799 419
17.4
2013
4 775 098
3 903 435
81.7
871 663
18.3
695 748
14.6
2014
4 557 411
3 831 140
84.1
726 271
15.9
943 958
20.7

By activity, all the sections recorded increase in the exit rates of companies in the market. The main increases came from other service activities (10.5 pp), arts, culture, sports and recreationconstruction (7.9 pp).

In terms of the entry rate, only electricity and gas recorded increase (2.3 pp). All the others faced decrease in the entry rate, and the biggest decreases came from mining and quarrying industry (-4.9%), construction (-4.0%), arts, culture, sports and recreation and water, sewage and waste management activities (both with -3.5 pp).

Electricity and gas was the activity which recorded the highest entry rate in 2014: 24.0%. . Já a maior taxa de saída foi apresentada por other service activities recorded the highest exit rate, with 27.8% of the enterprises leaving the market. The activity with the biggest proportion of active enterprises still in the market was manufacturing industry, with a survival rate of 87.5%.

Despite the decrease in the number of companies, number of salaried persons increases 0.5%

Between 2013 and 2014, the total salaried jobs increased 0.5% (170.4 thousand), in spite of the decrease in the number of enterprises. Those who started activities in 2014 brought 847.1 thousand salaried persons (2.4% of the total) to the market and enterprises leaving the market had 525.7 thousand salaried persons (1.5% of the total). Surviving companies employed 97.6% (34.4 million) salaried persons.

Number of enterprises and their respective rates,
by type of demographic event - Brazil - 2008-2014
Year
Types of demographic events
Active
Surviving
Entries
Exits
Total
Rates
(%)
Total
Rates
(%)
Total
Rates
(%)
Salaried Employed Persons
2008
26 978 086
26 160 232
97.0
817 854
3.0
414 908
1.5
2009
28 238 708
27 373 575
96.9
865 133
3.1
452 208
1.6
2010
30 821 123
29 797 370
96.7
1 023 753
3.3
363 848
1.2
2011
32 706 200
31 726 069
97.0
980 131
3.0
410 407
1.3
2012
33 915 323
32 964 847
97.2
950 476
2.8
453 082
1.3
2013
35 050 524
34 162 830
97.5
887 694
2.5
524 159
1.5
2014
35 220 894
34 373 780
97.6
847 114
2.4
525 652
1.5

Trade is responsible for almost 30% of the job posts generated by new companies

From the 847.1 thousand salaried jobs generated by companies which started activities in 2014, 252.9 (29.9%) came from trade; repair of motor vehicles and motorcycles; 146.5 thousand (17.3%), construction ; and 104.1 thousand (12.3%), lodging and food .

In relation to the total 525.7 thousand salaried persons from companies which left the market, 134.7 thousand (25.6%) were in trade; repair of motor vehicles and motorcycles; 118.8 thousand (22.6%), in manufacturing industry; and 85.4 thousand (16,3%), in adminstrative activities and complementary services.

Trade was the activity which recorded the biggest gains and the biggets decreases in terms of salaried employed persons coming from entry and exit of entterprises in 2014. The activity showed, however, absolute gain in terms of salaried employed persons with a positive balance of 118.2 thousand persons. Trade represented 44.9% (2.0 million) of the total enterprises and was also a highlight in relation to the absolute number of companies entering (289.3 thousand), exiting (437.7 thousand) and surviving (1.8 million), which represented, respectively, 39.8%, 46.4% ad 45.8% of the total enterprises in each condition.

Less than 40% of the companies survived after five years of activity

Out of the total 694.5 thousand enterprises born in 2009, 536.6 thousand (77.3%) survived in 2010; 452.5 thousand (65.2%), in 2011; 387.4 thousand, in 2012 (55.8%); 339.1 thousand (48.8%), in 2013 and 275,0 thousand (39.6%) survived until 2014. That means after five years of entry in the market, less than 40% of the companies survived.

It was also possible to observe a direct relationship with the company size: cpmpanies with more employed persons tend to remain longer in the market, whereas the smaller ones have smaller lowest survival rates. After five years of entry in the market, survival was 32.9% in the enterprises without salaried employed persons; 61.8% in the range of 1 to 9 persons and, in the range of 10 or more employed persons, 70.0%.

In this period, the activities recording the highest survival rates were human health and social services (55.3%), real estate activities (51.5%) and professional, scientific and technical activities (47.3%). The lowest rates came from other service activities (30.3%), lodging and food (35.9%) and mining and quarrying industry (37.0%).

South and Southeast record highest survival rates

The 4.6 million active companies, in 2014, had 5.0 million active local branches, out of which 51% were located in the Southeast; 22.2% in the South; 15.0% in the Northeast; 8.1% in the Central West and 3.6% in the North Region.

From the total local units, 4.2 million were survivals in relation to 2013 (83.9%). Entries and exits amounted to 798.7 thousand (16.1%) and 1 million (20.4%) units, respectively.

The South and Southeast Region recorded the biggest survival rates, 85.2% and 84.2%, respectively, above the national average (83.9%). On the contrary, the biggest entry and exit artes were observed in the North (19.3% and 28.1%), Northeast (17.3% and 24.9%) and Central West (17.6% and 20.9%), and also the lowest survival rates (80.7%, 82.7% and 82.4%, respectively0.

The Southeast and Northeast Region recorded the biggest percentages of salaried employed persons due to the creation of new companies, representing 47.9% and 23.1%, respectively, of salaried employed persons relative to entries in the market in 2014.

Among the Federation Units, the highlights were São Paulo (26.0%), Minas Gerais (11.4%) and Rio de Janeiro (8,7%). The smalest contributions to salaried persons relative to entries came from Roraima (0.2%), Acre (0.3%) and Amapá (0.4%).

28.3% of the salaried persons in administrative activities are in high-growth enterprises

In 2014, there were 31.2 Thousand high-growth enterprises, which is equivalent to 0.7% of the total active companies and 6.4% of the active companies with 10 or more employed persons.

The biggest proportions of high-growth enterprises, by activity, were found in: administrative activities and complementary services (10.5%), construction (9.6%) and in financial and insurance activities and relaated services (9.2%). On the contrary, public administration, defense and social security (2.3%), lodging and food (3.7%), arts, culture, sports and recreation (4.5%) recorded the smalles proportions.

High-growth enterprises employed 4.5 million salaried persons and paid R$ 103.3 billion in salaries and other compansation, which representes 15.4% of the salaried persons and 12.4% of salaries and other compensation of companies with 10 or more employed persons .

The section administrative activities and complementary services (28.3%) had the biggest proportion of salaried persons in igh-growth enterprises, followed by construction (23.8%) and information and communication (18.3%). On the other hand, eletricidaty and gás (3.0%), fonancial and insurance activities and related services (6.9%) and education (10,4%) recorded the smallest levels of participation.

 

Social Communication
September 14, 2016