The overall health of a supply chain often depends on the strength of small firms within the supplier network. That's why last week it was great to see that Equifax has compiled some encouraging data regarding small business bankruptcy trends in the US.
The extensive Equifax analysis, which focused on the Q4 2009 to Q4 2010 timeframe, looked at bankruptcy trends among the nation's more than 24 million small businesses. The study showed that:
small business bankruptcy petitions dropped in many areas throughout the US, with some Western regions experiencing sharp declines.
10 of the top 15 MSAs (metropolitan statistical areas) with the greatest number of small business bankruptcies in Q4 2010 experienced a year-over-year drop from Q4 2009.
The MSA which declined the most was the Chicago-Naperville area, which saw a 30.13 percent decrease year-over-year in Q4 2010.
Not all the news was positive, however. Equifax also found that five MSAs have experienced a year-over-year rise in bankruptcy rates. Among these, the Wisconsin-Rest of State MSA had a 16.52 percent jump in small business bankruptcies from Q4 2009 to Q4 2010 more than any other MSA on the top 15 list.
The state of California continues to be problematic, as well. The study showed that small business economic turmoil in California remained high throughout 2010 and accounted for nearly 20 percent of the country's business failures.
More details about the results, including charts and tables providing a more in-depth look at the key role California has played in national bankruptcy trends, are available here.