Privately held companies are growing sales at an annual rate of less than 4 percent in 2013, according to financial statements, according to preliminary estimates in the latest Sageworks Private Company Report today, a quarterly update on the health and state of privately held U.S. companies.
This estimated rate of growth is significantly lower than it has been in previous years. Private companies saw nearly double-digit sales growth in 2012 and 2011.
According to Sageworks chairman Brian Hamilton, this slowdown is troubling, considering the reverberations it might have on the U.S. employment situation. With business owners facing uncertainty surrounding policy issues and other external factors, Hamilton explains, “Companies haven’t been eager to take on new employees and extra overhead, even when they were seeing double digit sales growth. I worry about what will happen now that the rate of sales growth has cooled off.”
A Sageworks analysis of the health care sector identified some of the most and least profitable sub-industries related to health care and social assistance. With the Bureau of Labor Statistics projecting more than 5.6 million new health care and social assistance jobs being created between 2010 and 2020, this looks to be a much-discussed industry, in terms of job creation and public policy, for the foreseeable future.
Sageworks’ Private Company Report is a quarterly update on the health of privately held companies in America. It includes metrics on the average U.S. privately held company, as well as the performance of notable sectors and industries. The full report, including sector breakout and further analysis, can be found here.