Business start-ups plummeted in the first half as the fragile economy continues to dampen credit and create uncertainty about the sustainability of a recovery, a new job survey shows.
Outplacement and executive coaching firm Challenger, Gray & Christmas Inc. said its latest survey found an average of 3.7 percent respondents opted to start their own business in the first six months. That was down from 7.6 percent in the first half of 2009 and the 9.6 percent start-up rate averaged over the last two quarters of 2009.
The 3.4 percent start-up rate in the first quarter and the 3.9 percent rate in the second quarter represent the lowest two-quarter average on record, according to Challenger, which began tracking in 1986.
The highest two-quarter average on record occurred in the first half of 1989, when 21.5 percent of job seekers ended up starting a business.
The start-up activity figures are part of the Challenger Job Market Index, a quarterly survey of approximately 3,000 job seekers, many of whom were former managers and executives from a wide variety of industries nationwide.Â
 “It is difficult to pinpoint the exact reason behind the decline in start-up activity among former managers and executives,” said CEO John A. Challenger. “On one hand, it could be that the job market has improved to the point that many do not feel compelled to take the risk of going it alone. Then there is the fragility of the recovery and the uncertainty that comes with it. Many small business owners are increasingly pessimistic about business conditions and still find it difficult to get a loan.”   Â
