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TRANSCRIPT
Business Creation
Index
March 2017
National Association of REALTORS® Research Department
Introduction
The Business Creation Index (BCI) was created to monitor local economic
conditions from the perspective of NAR’s commercial members. The quarterly
report offers insight from commercial real estate professionals into whether
businesses are opening or closing by industry, population density, and subregion.
On a monthly basis, it tracks three key questions related to local market
conditions:
1. An increase of businesses opening in local communities in the last 30 days
2. An increase of businesses closing in local communities in the last 30 days
3. Net businesses opening and closing in local communities in the last 30 days
On the 2016 Profile of Commercial Members, NAR’s membership was asked the
above questions over the last year from July 2015 to June 2016. The results gave
way to creating the survey to gather monthly data and report changes on a
quarterly basis.
Additional topics will be examined in depth on
http://economistsoutlook.blogs.realtor.org/.
The next BCI survey releases for 2017 will be:
June 2017
September 2017
December 2017
2017 Business Creation Index
New Businesses Opening in
Communities
NAR’s commercial members were asked whether new businesses were opening
in their communities in the previous 30 days for January through March 2017.
Fifty-eight percent of respondents said they had seen an increase in
businesses opening in March 2017. Compared to November 2016, only
43 percent said they has seen an increase in businesses openings, the
lowest reported since the survey was launched in August 2016.
Thirty-four percent of respondents said they had not seen an increase in
businesses opening in March 2017, the lowest reported since the inception
of the survey.
2017 Business Creation Index
49% 50% 44% 43% 49% 48%55% 58%
43% 42% 48% 49% 43% 43%36% 34%
8% 8% 8% 8% 9% 10% 9% 9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
August September October November December January February March
An increase of businesses openings in community
in the last 30 days
(August 2016 through March 2017)
Yes No Don't Know
Businesses Opening
By Industry
NAR’s commercial members were asked the types of industries they saw
opening in their communities each month between January through
March 2017.
2017 Business Creation Index
5%
7%
14%
19%
20%
23%
35%
38%
55%
59%
% 10% 20% 30% 40% 50% 60% 70%
Transportation
Education/ Training
Technology
Services
Hospitality
Office
Real Estate
Health/ Medical/ Dental
Food/ Beverage
Retail
Industries Opening for January-March 2017
Businesses Opening
By Subregion
Sixty-three percent of members in the East South Central subregion saw
businesses opening in the last three months, followed by Middle Atlantic (57
percent), South Atlantic and West North Central (56 percent), and West
South Central (52 percent).
2017 Business Creation Index
43%
43%
50%
52%
52%
56%
56%
57%
63%
0% 10% 20% 30% 40% 50% 60% 70%
East North Central
Pacific
Mountain
New England
West South Central
West North Central
South Atlantic
Middle Atlantic
East South Central
Businesses Opening by Subregion
for January-March 2017
Businesses Closing in
Communities
NAR’s commercial members were asked whether businesses were closing in
their communities in the previous 30 days for January through March 2017.
Sixty-five percent of respondents said they had not seen an increase in
businesses closing in March 2017, which is a decrease from 73 percent
reported in December 2016.
Twenty-four percent of respondents said they had seen an increase in
businesses closing in March 2017, the highest since the survey’s inception
in August 2016 at 25 percent.
2017 Business Creation Index
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
25% 22% 21% 20% 17%23% 22% 24%
64% 67% 69% 69% 73% 66% 67% 65%
11% 11% 11% 11% 10% 11% 11% 11%
An increase of businesses closing in
community in the last 30 days
(August 2016 through March 2017)
Yes No Don't Know
Businesses Closing
By Industry
NAR’s commercial members were asked the types of industries they saw
closing in their communities each month between January through March
2017.
2017 Business Creation Index
1%
2%
2%
3%
5%
5%
8%
8%
21%
30%
% 5% 10% 15% 20% 25% 30% 35%
Transportation
Education/ Training
Technology
Hospitality
Health/ Medical/ Dental
Services
Real Estate
Office
Food/ Beverage
Retail
Industry Closings for January-March 2017
Businesses Closing
By Subregion
Twenty-nine percent of members in the Mountain subregion saw
businesses closing in the last three months, followed by Middle Atlantic,
East North Central, and New England (25 percent).
16%
19%
21%
22%
22%
25%
25%
25%
29%
0% 5% 10% 15% 20% 25% 30% 35%
West South Central
East South Central
South Atlantic
West North Central
Pacific
New England
East North Central
Middle Atlantic
Mountain
Businesses Closing by Subregion
for January-March 2017
2017 Business Creation Index
Net Change in Openings
to Closings
NAR’s commercial members were asked to compare businesses opening to
closing in their communities in the previous 30 days for January through
March 2017.
Fifty-two percent of respondents said they had seen more businesses
opening than closing in March 2017, a decrease from 55 percent the
previous month in February 2017 but an overall increase from 2016.
Twenty-nine percent of respondents said they had seen the ratio of
businesses opening to closing had stayed the same in March 2017, an
increase from 26 percent the previous month in February 2017.
2017 Business Creation Index
50% 52% 49% 49% 53% 52% 55% 52%
16% 14%13% 14% 12% 12%
11% 13%
25% 26% 30% 30% 28% 29% 26% 29%
10% 8% 8% 7% 8% 8% 8% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Net Openings and Closings
for August 2016 through March 2017
Don't Know
Opening and closings have remained the same in the last year
More businesses closing than opening
More businesses opening than closing
Methodology
The survey was conducted by the National Association of REALTORS® Research
Department. Each month, August through December 2016, a sample of NAR’s
commercial members were surveyed via email sampling.
Each month roughly 1,000 commercial members responded to the survey. The data
compiled for this report and was based on a total of 3,140 completed surveys.
Subregions are defined as follows:
New England
◦ – Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut
Middle Atlantic
◦ – New York, Pennsylvania, and New Jersey
East North Central
◦ – Wisconsin, Illinois, Indiana, Michigan, and Ohio
West North Central
◦ – North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, and Missouri
South Atlantic
◦ – Delaware, Maryland, Washington D.C., West Virginia, Virginia, North Carolina,
South Carolina, Georgia, and Florida
East South Central
◦ – Kentucky, Tennessee, Mississippi, and Alabama
West South Central
◦ – Texas, Oklahoma, Arkansas, and Louisiana
Mountain
◦ – Montana, Idaho, Nevada, Wyoming, Utah, Arizona, Colorado, and New Mexico
Pacific
◦ – Washington, Oregon, California, Alaska, and Hawaii
2017 Business Creation Index
2017 Business Creation Index
The National Association of REALTORS®, “The Voice for Real Estate,”
is America’s largest trade association, representing 1.2 million members, including
NAR’s institutes, societies and councils, involved in all aspects of the real estate
industry. NAR membership includes brokers, salespeople, property managers,
appraisers, counselors and others engaged in both residential and commercial
real estate.
The term REALTOR® is a registered collective membership mark that identifies a
real estate professional who is a member of the National Association of REALTORS®
and subscribes to its strict Code of Ethics.
Working for America’s property owners, the National Association provides a facility for
professional development, research and exchange of information among its members
and to the public and government for the purpose of preserving the free enterprise
system and the right to own real property.
NATIONAL ASSOCIATION OF REALTORS®
RESEARCH DIVISION
The Mission of the National Association of REALTORS® Research Division is to collect
and disseminate timely, accurate and comprehensive real estate data and to conduct
economic analysis in order to inform and engage members, consumers, and policymakers
and the media in a professional and accessible manner.
To find out about other products from NAR’s Research Division, visit
www.REALTOR.org/research-and-statistics.
NATIONAL ASSOCIATION OF REALTORS®
Research Division
500 New Jersey Avenue, NW
Washington, DC 20001
202-383-1000