70% of New Companies Fail in Brazil

A Brazilian store Between 2000 and 2006 726,600 companies were established each year, in average, in Brazil. That's what shows the 2006 Company Demography Research disclosed at the end of last month, by the Brazilian Institute of Geography and Statistic (IBGE). In the meantime, 493,800 were closed.

The average annual balance of surviving companies was 233,000, equivalent to 32.07% of all new establishments.

The average annual growth in the total of companies active in the period was 5.7%. In 2006, there were little more than 5 million companies active in the country.

According to the report, the greater number of companies in 2001 was the result both of greater entry of companies in the period analyzed (829,302) and due to a lower number of companies leaving (330,276). The low growth in 2006, in turn, was the result of average new entries of (710,868), and a greater number of exits in the period (664,489).

The study also shows that the average rate of entry of companies in the market, between 2000 and 2006, was 16.9%, whereas average exits were 11.2%.

Activities related to agriculture, livestock farming, wood, forestry exploration, fisheries and services represented the greatest rates of company entries. The lowest rates were identified in industrial activities.

The IBGE study also shows that business established between 2001 and 2006 was responsible for 46.5% of formal employment in companies in the period.

Of every ten formal jobs created by new companies (with up to five years in operation), between 2000 and 2006, an average of four were in trade, three in the service sector and three in industry. With regard to company size, five of these posts were established in micro companies, three in small ones, one in medium ones and one in large ones.

The study analyzed 5.1 million establishments among the 5.7 million companies and other organizations active in the 2006 Central Company Registry.

Anba

Tags:

You May Also Like

Brazil Meets the World in Abu Dhabi to Discuss Renewable Energy

A Brazilian delegation of businessmen, scientists and technicians in the area of renewable energy ...

Brazil Wants Debt Relief from World for Investing in Education

Immediately after the announcement of the UNESCO Index of Educational Development, ranking Brazil 72nd ...

Brazil’s Indigo Maker Tear Tíªxtil in Expanding Mode

Brazilian textile mill Tear Têxtil Indústria e Comércio is going to invest 36.4 million ...

Brazil Sends High-Level Team to London to Probe Death of Brazilian Killed by Police

The Brazilian government expressed indignation over new information published in the media about the ...

Crisis Spells Success Overseas for Brazil Fashion Industry

A program for the generation of export incentives known as Texbrasil, developed by the ...

Transport Makes Business with Brazil Hard, Say Syrians

Syrian businessmen are interested in buying more Brazilian products. They want to open a ...

Florida’s Trade Mission to Brazil Is On

Florida Secretary of State, Glenda Hood; Ambassadors Sue and Charles E. Cobb, Chairman of ...

Impeachment Act: The Brazilian Plot to Keep Corruption and Impunity Going

The already fragile legitimacy of Michel Temer’s interim government in Brazil took a huge ...

Brazil Gets Lowest Inflow of Dollars Since 2008

Brazil started the year with US$ 84 million greater outflow than inflow of dollars ...

Richest Man in Africa Wants a Piece of Brazil

The chairman of the board of Wind Telecomunicazioni SpA and Orascom Telecom Holding SAE, ...