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(reprint article)

Encouraged by favorable employment conditions and the continued availability of low-interest credit, the percentage of job seekers starting their own business increased to a 4-year high in the final quarter of 2016.

An average of 7.4 percent of job seekers started a business in the 4th quarter. That was the highest quarterly average since the 4th quarter of 2013, when 8.6 percent of job seekers started a business, according to the latest job search statistics from global outplacement and coaching consultancy Challenger, Gray & Christmas, Inc.

 “We tend to see an increase in start-up activity when confidence is high. And, right now, fledgling entrepreneurs are confident, not only about the chances of their business venture succeeding, but also about their chances of finding traditional employment if the venture should fail,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

 “Knowing that the job market is strong provides a mental safety net for would-be entrepreneurs. These individuals are also benefitting from the availability of relatively cheap money. Despite the Fed’s quarter-percentage increase in December, interest rates remain low and start-up capital is accessible,” said Challenger.

“Going forward, start-up activity could be influenced by the fact that we now have a President who is a proponent of deregulation. While most start-ups fall below the employment threshold where government regulations have a significant impact, the pro-business environment may still encourage more risk-taking among would-be entrepreneurs,” said Challenger.

“Where entrepreneurs may realize the biggest benefits of the Trump presidency is in tax reform and looser lending regulations, which could provide easier access to credit for those with weaker finances.”

Start-up activity continues to be dominated by older, more seasoned workers. According to Challenger data, 85.7 percent of those who started new businesses were over 40.

In addition, older workers who retire find themselves taking on consulting work or embarking on new projects,” added Challenger.


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