Business closures
up 15.9% last year

Even with 3,811 firms
opening, Hawaii had a
net loss of companies

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Star-Bulletin staff

More than 4,000 Hawaii businesses closed down last year as the events of Sept. 11 added to the continuing slowness of the economy. Business terminations were up 15.9 percent at 4,080 in 2001 from 3,521 in 2000, according to a new report from the Office of Advocacy in the U.S. Small Business Administration.

However, openings of new businesses made up for a lot of the closings. The SBA report said 3,811 new employers started in the islands last year, up 1.8 percent from 3,745 in the previous year.

Small businesses (those with 500 employees or less) held their place as by far the largest number of operations. The SBA said there were 28,569 employer businesses in Hawaii last year and 96.7 percent of them were in the small-business category

In 2000, there were 28,112 employer businesses in the islands, of which 96.8 percent were small businesses, the SBA said.

"Small business continues to be Hawaii's employer. Strong small businesses are vital to the health of Hawaii's economy," said Thomas M. Sullivan, chief counsel for advocacy at the SBA in Washington.

Small businesses employed 235,446, or 56.2 percent of Hawaii's workers, in 1999, the latest year for which the SBA had details.

"The events of 2001 posed critical challenges to the state of Hawaii as well as the nation," the SBA report said. "Nevertheless, the economic health of Hawaii benefited from its small businesses."

Created in 1976, the Office of Advocacy is an independent voice for small business within the federal government.