Business and Finance
Black healthcare businesses should thrive as the economy grows
Black businesses in healthcare and related industries are amongst those expected to learn the most from the growing U.S. economy.
According to a report by William Michael Cunningham, economist and owner of Creative Investment Research, these corporations make up 28% of all black-owned businesses in the country across every industry, meaning the black business community tends to fare higher when the sector grows.
His evaluation comes after gross domestic product (GDP) doubled, rising a surprising 2.8% in the second quarter of this yr from 1.4% in the first quarter. Spending on health care and related businesses increased by about $27 billion from the first quarter to the second.
Cunningham says much of the GDP growth in health care should translate into Black businesses doing relatively higher, “assuming these businesses have their costs under control and GDP growth trends continue, which we think they will.”
Cunningham tells BLACK ENTREPRENEURSHIP that for minority-owned businesses, higher economic growth should result in greater availability of credit and investment opportunities. He added that these opportunities are crucial to the sustainability of minority businesses.
The healthcare sector is critical for minority employment and ownership. “Growth in healthcare should be particularly significant for Black businesses, given their overrepresentation in this space.”
In the potential impact on other industries where Black businesses operate, Cunningham says the second-quarter 2024 data reveals sector-specific findings which are key to understanding the state of minority-owned businesses. For example, he says, the data shows a rise in consumer spending on services and goods, which should bode well for minority-owned businesses.
Lists significant inputs in motorized vehicles and parts, recreational goods and vehicles, household equipment and durables, and gasoline and other energy products in the goods sectors. Black businesses are widely represented in these areas, with the exception of energy.
In addition, he says, the increase in private investment in inventory mirrored increases in wholesale and retail trade. “Retail trade accounts for 38 percent of businesses owned by black and other minority employers, underscoring its importance to minority communities, so growth in retail trade should also support increased minority economic activity.”
However, Cunningham emphasizes that the advantages of growth are unevenly distributedMinority-owned businesses face increased competition without proportional access to the resources obligatory to compete effectively.