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Black business: a year-end review.

Since 1987, black manufacturers' sales grew, auto dealers held on and construction firms shrank.

Since 1987, black-owned businesses have both grown faster than American business in general and have been affected more deeply by the 1990-91 recession. That is why a year-end look at their status and prospects is in order.

It is estimated that 1991 sales of black-owned firms, including the receipts of regular corporations, were about $33.6 billion or .494% of total U.S. company sales. These estimates of include the receipts of regular corporations. In contrast, the last official figures published by the U.S. Bureau of the Census for 1987 under-counted such sales by excluding black firms which operate through the regular corporate form of organization. Before the recession, black companies' sales grew moderately faster that all other companies. Between 1987 and 1990, black business sales rose by 25.6% compared with a gain of 20.8% for all companies. The two groups had annual average growth rates of 7.9% and 6.5%, respectively.

But business growth patterns vary noticeably. This is illustrated by the BLACK ENTERPRISE INDUSTRIAL/SERVICE 100 and the BE AUTO 100. Between 1987 and 1990, total sales of the BE 100s companies rose by 16.4%, or 5.2% annually. Sales of automobile dealers expanded 30.1% or an annual rate of 9.2%, while receipts of industrial/service companies rose by 9.7% or an annual rate of 3.1%.

Manufacturing was the fastest-growing area as black-owned firms saw their sales climb by 211.7% during the three-year period. They were followed by computer/information services firms (103.7%) and media enterprises (80.3%). At the opposite extreme, sales decreases were recorded by petroleum distribution firms (-81.9%), security/maintenance companies (-17.7%), construction firms (-10.3%), health care and beauty aid companies (-9.9%), and food and beverage companies (-7.2%).

For the most part, data are unavailable to calculate black market share. However, the figures published for firms on the BE 100s list indicate trends. In 1987, the BE AUTO 100 concerns had sales of $2.04 billion, equal to .62% of total receipts of all U.S. dealers. By 1990, the sales of black dealers had risen to $2.65 billion equaling .70% of the total. In 1987, sales of BE INDUSTRIAL/SERVICE 100 companies were $129 million and $403 million in 1990. These amounts represented .054% and .138% of total manufacturing shipments in their respective years. In 1987, receipts of the BE INDUSTRIAL/SERVICE 100 construction firms were $389 million and $310 million in 1990. Black firms' receipts as a share of total construction put in place were .098% in 1987 and .071% in 1990.

The 200 BE companies and dealerships had total sales of $6.16 billion in 1987 and $7.17 billion in 1990. They accounted for .114% of all business sales in 1987 and for .11% in 1990.

The recession's effect on sales put a brake on the growth rate (See "Facing An Uphill Battle," November 1991). At the macro level, a decline of 1.1% occurred in real gross national product.

On an annual basis, the growth rate of total business sales decreased from 7.3% in 1989 to 3.3% in 1990, while among black firms, the growth rate declined from 10% in 1989 to 4% in 1990. Thus, the moderation in sales growth was more noticeable among black firms than among businesses generally.

By the last half of 1991, economic activity (as measured by real GNP), was expanding at an annual rate of 3.0%. It is estimated that total business sales rose 4.4% in 1991, and expansion is projected to climb to 6.3% in 1992. The corresponding gains for black companies are estimated at 4.5% in 1991 and projected at 6.7% in 1992. If these increases in sales materialize, black companies' share of the total will edge up to 0.495% in 1992.
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Article Details
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Author:Brimmer, Andrew
Publication:Black Enterprise
Article Type:Column
Date:Dec 1, 1991
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Next Article:Pumping up the jam for profits.

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