Challenger Start-Up Report: Lowest Rate On Record

A new survey shows that start- up activity plummeted in the first half of 2010 as would-be entrepreneurs were either scooped up by employers or scared off by fragile economic conditions, a tight lending market and uncertainty over the sustainability of the recovery.

Results of a survey of job seekers released by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc., show that an average of 3.7 percent opted to start their own business in the first half of 2010. 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.

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