Private Company Trends Remain Positive in January
by Terri Eyden on
Private companies in the United States continued to grow sales and expand their net profit margins in the period ending in January 2013. Private company credit risk also appears to be improving, with the average private company's likelihood of default currently standing around 3 percent, compared to 4.6 percent a year ago. Overall, sales are strong, though growing at a slower rate than they were a year ago, and net profit margins are above pre-recession levels.
Private construction companies continue to report higher sales growth now than a year ago, validating some of the positive news coming from the US housing market. In contrast, privately held manufacturer, retailer, and wholesaler sales are growing slower now than they were a year ago. "Nevertheless," Sageworks Analyst Libby Bierman explained, "if you look at January 2013 compared to the previous month, sales in all three sectors look to be heading in the right direction."
"The state of private companies is fairly positive. Companies are making money, and they've got some cash flow. We are in an economic recovery, and the strong performance of private companies reflects this recovery. Of course the big problem right now is still jobs. These companies are not hiring as many people as they used to, which is troubling," said Sageworks Chairman Brian Hamilton.
Sageworks releases a monthly report on the state 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.
Raleigh, North Carolina–based Sageworks is a financial information company. Sageworks' data and applications are used by thousands of accounting firms and financial institutions 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.