June 1949
SUKVEY OF CUEEENT BUSINESS
20
ate in the new series (1,003,000 firms or 34 percent) than in
the old (1,066,000 firms or 38 percent).
The slight decrease in the business population in late 1948
was distributed rather evenly among the manufacturing,
retail, finance, and service segments. The number of firms
in mining, wholesale trade, and transportation and public
utilities remained about the same, while construction continued to increase slightly.
Eelative changes in number of firms for the years 192938—not shown in the chart—were not appreciably affected
by the revision, though of course the level was raised in all
of these years in keeping with the adjustment already noted
in the 1939 bench mark.
June 1949
portation, communication and public utilities and for wholesale and retail trade. As already indicated, the increases
were in part the result of inclusion of small firms not previously counted.
In addition, alterations in level resulted from certain
changes in classification and, in some cases, the elimination of double-counting of firms whose activities fall in more
Chart 2.—Firms in Operation: Actual and Calculated
MILLIONS OF FIRMS
4.0
...-*•••••
Relationship with gross national product
Previous articles on this subject have often made use of a
comparison between the actual number of firms in operation
and a hypothetical measure of the business population, calculated on the basis of the average prewar (1929-40) relationship between the number of firms in operation, the general
level of business activity, and time. Chart 2 presents the
new series and the corresponding calculated number of firms
in operation.
It may be noted that the use of the new series has affected
the old relationship only slightly: with a rise or fall of
1 billion dollars in the deflated gross national product a
change of 12,100 is now associated, as against the former
change of 11,500, and the allowance for secular increments
is also about the same. As before, moreover, the new series
shows a return to the prewar relationship in the third quarter
of 1947, and relative stability thereafter.
Industry
differences
Although the effect of the revision upon the total number
of firms in operation is not great, more substantial changes
have been made in some of the industry divisions with respect
both to levels and to year-to-year changes. The revision
raises the estimated number of firms in operation in manufacturing, mining and quarrying, finance, insurance and real
estate, and services while lowering the estimates for trans-
3.5
ACTUAL
3.0
I
2.5
1929
I
31
11
I I I
33
-«
35
37
39
41
43
45
ANNUAL AVERAGE
46
*•
47
48
END OF QUARTER
U. S. DEPARTMENT OF COMMERCE, OFFICE OF BUSINESS ECONOMICS.
49-168
1
Calculated from a linear least regression equation for the years 1929-40, Y= 2,349+12.07 X+
7.17t, where Y= number of firms (thousands); X—gross national product, excluding government, agriculture, and professional and other services excluded from the business population
(billions of 1939 dollars); and t=time in 6-month intervals centered at December 31, 1934.
Source of data: U. S. Department of Commerce, Office of Business Economics.
than one industry division. Included in the latter category,
for example, were radio and 7appliance outlets operated by
utility companies, "company' stores and commissaries, and
sales branches owned and operated by manufacturers, which
are now excluded from the trade divisions.
An important change in classification was the inclusion of
auditing, bookkeeping, and accounting firms in the service
Table 1.—Annual Average Number of Business Firms in Operation, by Years, by Industries, 1929-48
[Thousands]
Year
Manufacturing
ConAll
tract
Leather Lumber Paper Printing
indus- conand Textiles
and
and
and
and
tries struc- Total Food
and
kindred
allied
leather lumber
textile
tion
products products products
products products publishing
Chemi- Stone,
Metals
and
cals and clay, and
allied 1
glass
metal
products products products
Other
Whole- Retail
sale
trade
Finance,
insur- Service All
indus- other
ance,
and real tries
estate
233.0 257.6
229.4 228.5
217.8 195.6
201.5 166.7
184.7 167.1
40.5
38.0
33.2
28.8
29.9
34.5
31.2
28.2
23.3
23.8
5.3
4.8
4.3
3.5
4.0
58.7
46.5
33.5
27.5
27.1
3.3
3.2
2.9
2.7
2.9
42.6
41.1
36.7
32.0
30.4
11.6
10.0
9.2
8.5
8.6
8.6
7.6
6.3
5.2
4.8
32.4
29.9
26.7
22.6
23.5
20.0
16.3
14.7
12.7
12.1
114.9
113.8
111.6
109.8
110.0
1341. 1
1339. 2
1330. 1
1314. 8
1304. 4
324.8
323.5
313.7
296.0
289.1
670.5
679.2
671.6
666.9
652.1
155. 2
148.7
143.4
138. 9
139. 8
1934
1935
1936
1937
1938
2951.7 179.1 188.4
3065. 2 179.8 205.7
3146. 0 191.5 211.7
3215. 0 199.0 215.4
3151.8 193.6 203.4
34.6
36.8
37.2
38.3
35.9
27.2
29.5
29.0
27.0
25.5
4.3
4.5
4.0
4.5
4.2
31.6
36.4
40.1
42.1
40.3
3.0
3.1
3.3
3.4
3.3
33.3
36.1
37.0
38.0
36.2
9.8
10.0
10.4
10.6
10.2
5.3
6.0
6.6
6.6
6.0
26.9
28.4
29.3
29.6
26.1
12.5
14.7
14.8
15.1
15.6
118.0
122.0
123.1
132.9
130.2
1351. 9
1403. 8
1448. 5
1489. 5
1472. 7
290.1
291.8
283.8
287.2
293.7
672.6
699.8
714.9
718.7
689.0
151. 5
162. 2
167. 5
172.4
169. 2
1939 .
1940
1941
1942
1943
3305. 6
3382. 8
3363. 6
3302. 2
3045. 1
223.0
226.7
235.3
237.9
238.8
37.6
37.6
38.6
38.6
37.1
30.1
30.6
31.5
31.8
32.1
4.5
4.4
4.6
4.4
4.7
43.7
46.7
49.5
49.6
52.5
3.5
3.5
3.5
3.6
3.6
38.9
38.8
39.3
38.5
37.1
10.7
11.2
11.3
11.7
11.5
7.0
7.2
7.4
7.5
7.2
30.9
32.0
34.3
37.1
37.8
16.4
14.7
15.4
15.2
15.1
137.0 1558. 9
146.8 1596. 0
155.1 1590.1
156.5 1541. 8
141.5 1400. 3
306.0
310.5
305.8
312.4
301.2
701.8
718.3
705.8
699.2
652.5
179. 2
185. 3
184.6
177. 2
153.3
1944
1945
1946
1947 2
1948
3062. 2 153.4 245.2
3258. 4 176.7 262.8
3605. 4 242.6 301.9
3879. 0 289.3 330.5
3976. 4 318.6 328.3
36.6
36.0
36.8
37.6
33.4
36.1
41.6
43.8
4.9
5.5
6.6
6.8
54.6
59.3
71.2
83.7
3.5
3.6
4.0
4.3
37.9
39.5
42.4
44.7
11.4
11.5
12.0
12.1
7.2
7.7
11.2
13.1
39.3
43.6
51.3
57.7
16.3
20.0
25.0
26.8
146.1
159.7
181.1
196.6
202.1
312.3
325.4
337.6
344.7
346.3
657.1
706.0
772.8
830.5
854.1
154. 8
171.1
195.4
214.6
222.5
3097. 1
_ 3062. 3
2984.0
2894. 5
2847.2
1929
1930
1931
1932
1933
199.7
199.2
186.8
177.2
157.5
1
Includes products of petroleum and coal.
2 Preliminary; data for detailed industry groups not yet available.
NOTE.—Because of rounding, totals do not necessarily equal sum of components.
Source: U. S. Department of Commerce, Office of Business Economics.
Digitized for FRASER
http://fraser.stlouisfed.org/
Federal Reserve Bank of St. Louis
1393. 3
1456. 6
1574. 0
1672. 8
1704. 6