Business Failure Rates Creeping Up Again Economic Slowdown Blamed For 6% Rise In First Half Of ‘96

Business failures rose 6 percent in the year’s first half as a slowing economy took its heaviest toll on agriculture, construction and retailing, according to a private report released Thursday.

During the first six months of 1996, 38,866 U.S. businesses failed, up from 36,560 in the same period a year ago, the financial information provider Dun & Bradstreet Corp. reported. Liabilities of the failed businesses rose 51 percent to $17.08 billion.

“Failure rates remain well below the peak levels experienced in 1992, but they are clearly rising as the economy slows,” Joseph W. Duncan, vice president and chief economist of D&B, said in a statement.

He said the faster growth in liabilities of the failed companies “suggests that the more modest pace of growth is taking an exaggerated toll on larger, more heavily-leveraged businesses that had anticipated more robust economic activity in the first and second quarters.”

Industries seeing the biggest increases in failures were agriculture/ forestry/fishing at 46 percent, construction at 18 percent and retail trade with an increase of 13 percent.

Duncan said reduced consumer activity amid severe winter weather and a slow 1995 holiday shopping season appears to have played a role in the high failure rates. Industrial companies fared relatively well, he added.