New business starts have exceeded closures for most of the past decade
Favorable movement since the last available data
Benchmark: Maine’s ratio of business start-ups to closures will be positive and equal to or above the national average.
The creation of new businesses is a vital economic activity. Entrepreneurship contributes to innovation, creates jobs, and builds wealth. In a vibrant economy, people have the skills to identify and respond to business opportunities, access to capital, supports for starting and scaling businesses, and connections to human capital.
This entrepreneurship metric compares the number of business establishments that are started in Maine each year with the number that close. It includes any establishment with employees covered by unemployment insurance.
A start-up-to-closure ratio greater than 1 means more businesses are being created than closed each year. In 2020, Maine’s ratio of start-ups to closures was 1.09, meaning 9% more businesses were created (5,104) than closed (4,676). This is an increase from 1.04 in 2019, and above the U.S. ratio of 1.05. There was a spike in business closures in early 2020 coincident with the early days of COVID, but there was an increase in business starts in the second half of the year.
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Ratio of Business Start-ups to Closures
U.S. Bureau of Labor Statistics, Business Employment Dynamics