April 26, 2012 (The Editor’s Desk is updated each business day.)
Average size of establishments: a look at industries
For the private sector overall, the average size of establishments—the ratio of employment to the number of establishments—rose through each of the years of the 1990s economic expansion (1994–2000). From 2000 to 2007, the average establishment size fell slightly during each year—regardless of whether the economy was expanding or contracting. The trend in the average size of establishments changed in almost all industries during the 2000s expansion (2003–2007) compared with the 1990s expansion.
[Chart data]
After the 2001 recession, the trend in the average establishment sizes for industries was either to slower growth or to an accelerated decline. In cyclical industries such as construction and retail trade, the average size grew during the 1990s economic expansion and then later grew at a lower rate during the 2000s expansion.
In industries such as wholesale trade, transportation and warehousing, and administrative and support services, the average size grew during the 1990s economic expansion and then became flat during the 2000s expansion.
Industries whose average size grew during the 1990s but declined during the 2000s included manufacturing, information, real estate and rental and leasing, health care and social assistance, and arts, entertainment, and recreation.
In the finance and insurance, management of companies and enterprises, and educational services industries, the average size of establishments was flat or declined during the 1990s economic expansion and declined more rapidly during the 2000s expansion.
These data are from the Business Employment Dynamics program whose data are derived from data from the Quarterly Census of Employment and Wages. To learn more, see "The declining average size of establishments: evidence and explanations" (PDF), by Eleanor J. Choi and James R. Spletzer in the March 2012 issue of the Monthly Labor Review.
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