Inegi presented the first set of results of the Study on Business Demography 2021 (EDN 2021) with information on the micro, small and medium-sized establishments that carry out manufacturing, commercial and non-financial private services activities that survived, were born and died at 27 months after the 2019 Economic Censuses ended.
According to this latest census, 99.8% of the country’s establishments are micro, small or medium-sized and due to their characteristics, these economic units tend to present greater changes with respect to large companies, in terms of income, employed personnel, location, closings and openings, among other aspects.
To this natural behavior had to be added the effects of the pandemic, which led many businesses to pause their activities or to close permanently.
Which ones have started operations, closed or continue to operate 27 months after the 2019 Economic Censuses? The findings are very interesting:
Nascent businesses
Of the 4.9 million establishments, the EDN 2020 estimated that 619 thousand 443 establishments were born while 1 million 010 thousand 857 closed their doors permanently. For its part, the EDN 2021 estimated that 1.2 million were born and 1.6 million closed, which means that between October 2020 and July 2021, the proportion of births increased and the proportion of deaths decreased compared to what was observed in May 2019 to September 2020.
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Those who did not survive
However, in the EDN 2020 the highest proportion of deaths of establishments in non-financial private services was observed with 24.92%, followed by commerce with 18.98% and manufacturing with 15% of definitive closures of establishments.
The EDN 2021 recorded the following proportions of mortality of establishments: non-financial private services with 38.16%, followed by trade with 29.88% and manufacturing with 25.69%.
The commerce sector maintained the highest proportion of new establishments with 13.75% in 2020 and 27.13% in 2021.
In summary, in the EDN 2021 it is observed that the proportion of births practically doubled with respect to the proportion of births in the EDN 2020, while the proportion of deaths grew by a factor of around 1.6.
Likewise, by size of establishment, the proportion of births almost doubled for micro and more than double for SMEs, while the proportion of deaths increased about 1.5 times for micro, while for SMEs it remained practically constant, which means a recovery of jobs in the period October 2020 to July 2021 (EDN 2021) compared to what was observed from May 2019 to September 2020 (EDN 2020).
Entities with the highest business births and deaths
Another interesting data is that in 2020 Tlaxcala was the entity with the highest proportion of births (19.31%), while in 2021 it was Hidalgo (36.14%). Regarding the deaths of establishments, Quintana Roo remained the entity with the highest proportion of establishments that closed permanently: 31.88% in 2020 and 46.59% in 2021. Oaxaca and Chiapas registered the lowest proportion of closures: 13.7% in 2020 and 26.34% in 2021, respectively.
Of the effects on workers
As this first set of results from the Inegi Study on Business Demography 2021 (EDN 2021) points out, the demographic events of businesses are also reflected in the number of employed people.
In this sense, it stands out that at the national level for every 100 people who were employed in 2019, around 20 people stopped working for the establishments that died in 2020 and around 27 in 2021.
Finally, the EDN 2021 estimated that the entities that had the highest proportion of employed personnel in the nascent establishments were Hidalgo (27.56%), Tlaxcala (27.23%) and Puebla (26.15%). The entities with the lowest proportion of employed personnel in the establishments that were born were: Coahuila (8.57%), Quintana Roo (8.46%) and Nuevo León (6.65%) in 2021. The EDN2 2021 estimated that the highest proportion of employed personnel that left work due to the closure of establishments was registered in Quintana Roo (39.66%), Colima (32.95%) and Tabasco (31.77%). Oaxaca (23.38%), Sonora (21.96%) and Coahuila (19.40%) are the entities with the lowest proportion of employed personnel in establishments that died in 2021.
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