Business openings hit all-time record in 2018

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Business openings hit all-time record in 2018

Last year, more companies were opened than ever before. But few new enterprises are able to survive for five years.

According to Statistics Korea on Thursday, the number of companies that were newly opened in 2018 totaled 920,000.

That’s a 0.7 percent increase compared to the previous year.

It is also the most since data were first compiled in 2006.

A total of 234,000 real estate companies were opened last year, up 8.6 percent from the previous year and 25.5 percent of all newly-opened businesses.

New wholesale and retail business establishments totaled 200,000, down 4.7 percent on year and 21.8 percent of the total new businesses.

A total of 158,000 lodging and restaurant businesses were opened, down 3.2 percent from 2017.

While many companies were formed, many were closed.

In the wholesale and retail category, 178,000 businesses were shut in 2017. That’s a 6.9 percent increase compared to the previous year.

In the lodging and restaurant category, 146,000 businesses closed, up 2.7 percent, while 136,000 real estate businesses were closed, up 28.8 percent.

The survival rate for newly-established businesses was low. The study found that in 2018, 65 percent were able to survive one year. That means 35 percent failed.

Survival has become more difficult as the years passed.

In 2016, the first-year survival rate was 65.3 percent.

The five-year survival rate was 29.2 percent in 2018, which means more than seven out of every 10 newly-opened businesses closed within five years.

Businesses with the lowest five-year survival rates include: finance and insurance, at 17.6 percent, and arts, sports and leisure, at 18.4 percent.

Of new lodging and restaurant businesses, 19.1 percent survived five years.

As of 2018, 6.25 million businesses were operating in Korea, up 3.3 percent on year.

BY LEE HOJEONG [lee.hojeong@joongang.co.kr]

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