Southern California – America’s Small Business Bankruptcy Leader

02 Aug Southern California – America’s Small Business Bankruptcy Leader

In a globalized business environment, it should be no surprise that some of the more interesting – and better – economic reporting on the US economy now comes from offshore.

Last month, China’s Xinhua news agency reported that California leads the nation in small-business bankruptcies.  The report – based on data reported by Equifax – covers small business filings under all applicable chapters of the Bankruptcy Code (i.e., Chapters 7, 11, and 13).  The Xinhua report (it broke the story a day before the Orange County Register) is here.

Equifax’s reporting shows that California remains the most impacted state, with the Los Angeles and Riverside/San Bernardino MSA’s leading the nation in small business bankruptcy flings by a significant margin.  

The chart below provides a closer look at this trend.

                                                    # of
                 MSA         # of Bankruptcies Bankruptcies  % of Increase
                                    Q1 2009        Q1 2010
    Los Angeles-Long
     Beach-Glendale, CA                899          1035          15.13%
    Riverside-San
     Bernardino-Ontario,
     CA                                663           736          11.01%
    Sacramento-Arden-
     Arcade-Roseville,
     CA                                462           522          12.99%
    Houston-Sugar Land-
     Baytown, TX                       365           399           9.32%
    San Diego-Carlsbad-
     San Marcos, CA                    345           387          12.17%
    Portland-Vancouver-
     Beaverton, OR-WA                  276           386          39.86%
    Denver-Aurora, CO                  304           382          25.66%
    Santa Ana-Anaheim-
     Irvine, CA                        359           370           3.06%
    California -Rest of
     State                             233           335          43.78%
    Phoenix-Mesa-
     Scottsdale, AZ                    234           327          39.74%
    Dallas-Plano-
     Irving, TX                        348           323          -7.18%
    Chicago-Naperville-
     Joliet, IL                        395           314         -20.51%
    Atlanta-Sandy
     Springs-Marietta,
     GA                                336           304          -9.52%
    Oregon -Rest of
     State                             235           299          27.23%
    ---------------                    ---           ---          -----
    New York-White
     Plains-Wayne, NY-
     NJ                                335           272         -18.80%
    ------------------                 ---           ---         ------

Inc. Magazine picked up the story last week, commenting that “no area has been insulated from the recession and the economy clearly isn’t rebounding quickly enough.”

No kidding.