Private Companies Growing Sales at Slower Rate than Previous Years
by Terri Eyden on
On September 23, Sageworks released its latest Private Company Report, a quarterly update on the health and state of privately held US companies.
Preliminary estimates show that privately held companies are growing sales at an annual rate of less than 4 percent in 2013, according to financial statements. This estimated rate of growth is significantly lower than it has been in previous years. Private companies saw nearly double-digit sales growth in 2012 and 2011.
According to Sageworks chairman Brian Hamilton, this slowdown is troubling, considering the reverberations it might have on the US employment situation. With business owners facing uncertainty surrounding policy issues and other external factors, Hamilton explains, "Companies haven't been eager to take on new employees and extra overhead, even when they were seeing double-digit sales growth. I worry about what will happen now that the rate of sales growth has cooled off."
A Sageworks analysis of the health care sector identified some of the most and least profitable sub-industries related to health care and social assistance. With the Bureau of Labor Statistics projecting more than 5.6 million new health care and social assistance jobs being created between 2010 and 2020, this looks to be a much-discussed industry, in terms of job creation and public policy, for the foreseeable future.
Sageworks' Private Company Report is a quarterly update on the health of privately held companies in America. It includes metrics on the average US privately held company, as well as the performance of notable sectors and industries. The full report, including sector breakout and further analysis, can be found on the Sageworks website.
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Sageworks is a financial information company that provides risk management, financial analysis, and industry benchmarking solutions to financial professionals. Sageworks' data and applications are used by thousands of banks and accounting firms across North America. The company has been named to the Inc. 500 list of the fastest growing privately held companies in the United States and to the Deloitte Technology Fast 500.