WASHINGTON – Fueled by a rapidly expanding Hispanic consumer market, the number of Hispanic-owned businesses is growing much faster than the national rate for other companies.
Hispanics owned nearly 1.6 million businesses in 2002, a 31 percent increase from five years earlier, according to a report Tuesday by the Census Bureau. The number of all U.S. companies grew by 10 percent, to about 23 million, during the same period.
"The Hispanic consumer market is exploding," said Michael Barrera, president and CEO of the U.S. Hispanic Chamber of Commerce. "Who knows that consumer market best?"
Hispanic consumers spend $700 billion a year, a figure that is expected to climb to $1 trillion by the end of the decade, Barrera said at a news conference.
Ronald Langston, director of the Commerce Department's Minority Business Development Agency, said immigration is helping to increase the diversity of America's economy.
He noted that one in 10 U.S. workers is Hispanic, a figure that is expected to grow to one in four by 2050.
"The United States will once again become a nation of immigrants," Langston said.
The overwhelming majority of Hispanic-owned businesses were one-person enterprises, according to the report. Only 13 percent had any employees other than the owner. About a fourth of all U.S. businesses had employees in 2002, the report said.
New businesses started by Hispanics face many of the same problems as those started by non-Hispanics, said Louis Olivas, assistant vice president for academic affairs at Arizona State University. Money to start and expand is usually the biggest hurdle, he said.
"All startup businesses face funding issues," Olivas said.
Some Hispanic business owners also face language barriers, but those who speak both Spanish and English have advantages, he said.
The report is based on administrative records and a survey of 2.4 million businesses. The Census Bureau defines Hispanic-owned businesses as private companies in which Hispanics hold at least 51 percent of stock or interest. The report does not classify public companies, with publicly traded stock, because they can be owned by many stockholders of unknown ethnicities.
Hispanics owned nearly 7 percent of all businesses in 2002, up from about 6 percent in 1997.
They made up a little more than 13 percent of the population in 2002, but they have accounted for half of the nation's population growth since the start of the decade, according to a recent report by the Brookings Institution, a Washington think tank.
Among the report's findings:
_Nearly three in 10 Hispanic-owned firms were in construction or service-related industries in 2002.
_Hispanic-owned businesses generated nearly $222 billion in revenue in 2002, up 19 percent from five years earlier.
_The number of Hispanic-owned businesses in New York grew by 57 percent from 1997 to 2002, faster than any other state. Rhode Island, Georgia, Nevada and South Carolina rounded out the top five.
_New York City had 129,461 Hispanic-owned businesses in 2002, more than any other city. It was followed by Los Angeles, Houston, Miami and San Antonio.
_There were 29,184 Hispanic-owned firms with receipts of $1 million or more in 2002.
_There were 1,510 Hispanic-owned firms with 100 or more employees. Those firms generated more than $42 billion in receipts.
_About 44 percent of Hispanic business owners were of Mexican descent.