Factors Contributing To Lower Business Bankruptcies Rates In Arizona
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Factors Contributing to Lower Business Bankruptcies Rates in Arizona
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Factors Contributing to Arizona Business Bankruptcies
Over the past few years there have been trend towards lower number of bankruptcies of Arizona businesses. Since the year 2003 there has only been one year that the bankruptcy rate did not decrease, that year being 2005. A couple factors in Arizona contributed to this trend; a robust real estate market and an increase in consumer spending.
Business bankruptcies in Arizona were trending lower over the past few years, Table 1
Business Bankruptcies.
2006
# Bankrupcies
% change
(7.3)
(31.5)
(50.1)
2004 saw an increase in bankruptcies of 9.4%, but the overall trend is that business bankruptcies in Arizona have continued to trend lower.
One factor is the strong real estate market. Home sales and average price increased over this time period.Table 2
Homes sales
2006
Homes sales
80,052
98,922
104,725
74,486
Avg cost
149,400
164,900
235,100
275,000
High growth rates of real estate allowed many businesses to offer products and services to new homeowners or people moving into larger homes. With some much growth in the construction industry many companies were able to increase wages. There was an average of 7.4% annual increase in income over this time period.
Another factor that lead to a decrease in bankruptcies over this period of time was the increase in consumer