OFFICE OF STOPALL PRODUCTION |
| DIRECTOR Artifice Jagr |
ABOUT
No direct information on the survival experience of firms is available by minor industry groups. As is noted below, however, under conditions which maintain the business population at a constant age distribution and level, the survival pattern can be directly computed from the over-all rate at which firms are newly acquired or are sold or liquidated. These two rates are identical under these conditions. Since major departures from stability tend more or less to affect all groups, it is quite likely that turnover rates are indicative at least of the relative position of the minor industries with respect to survival patterns.
Table 5 presents average turnover rates from 1949 to 1951 for the major industries and for minor groups in manufacturing, retail trade and services. These minor groups are ranked (from lowest to highest turnover rates) within their respective industries. The last column of the table is presented primarily to show the correlation of major group "turnover" rankings with the rankings as measured by another index of survival experience, the median age achieved by new concerns in the 1945-50 period. As may be seen, the relative positions of the industries are rather close under the two methods. Hence it is believed that the ranks of the minor industry groups—available only from turnover data—may be taken as fairly reliable indexes of relative survival rates.
Within the retail trade division, for example, only three of the seven groups have discontinuance plus transfer rates in excess of that for all industries combined—filling stations, eating and drinking places, and the food and liquor group. Thus it may be that these divisions have life expectancies lower than average and that the life expectancy of firms in other lines of retail trade is better than average.
Within manufacturing the better records were achieved in printing and publishing and in the manufacture of paper and products; stone, clay and glass; and metals and metal fabrication. It may be noted that the relatively poor record for manufacturing as a whole is largely attributable to the lumber group in which the structure of the industry makes for extremely high turnover rates.