Black Healthcare Firms Should Prosper Most From Growing Economy, According To New Report
Recent news of the nation's economy expanding could prove advantageous for Black firms in the healthcare sector.
Alex.Haynes
Black firms in healthcare and related industries are among the enterprises that should benefit the most from a growing U.S. economy.
Based on a report by William Michael Cunningham, an economist and owner of Creative Investment Research, those firms account for 28% of all Black-owned firms nationally in any industry, meaning that the Black business community typically does better when that sector expands.
His analysis comes after the gross domestic product (GDP) doubled by surprisingly rising 2.8% in this year’s second quarter from 1.4% in the first quarter. Spending in healthcare and affiliated businesses grew by about $27 billion from the first to the second quarter.
An influential economic indicator, the GDP basically measures the value of the output of all goods and services produced in America during a specific time frame.
Cunningham said that a large component of the GDP gain occurring in healthcare should translate into Black firms doing relatively better. “That’s assuming those firms have costs under control and GDP growth trends continue, which we believe they will.”
Cunningham told BLACK ENTERPRISE that for minority-owned businesses, higher economic growth should lead to greater availability of credit and investment opportunities. He added those opportunities are vital for the sustainability of minority enterprises.
The healthcare sector is critical to minority employment and ownership. “Growth in health care should be especially significant for Black firms, given their overrepresentation in that space.”
Breaking down the potential impact in other industries where Black businesses operate, Cunningham said data for Q2 2024 reveals sector-specific performance that is crucial for understanding the landscape for minority-owned companies. For instance, he said, the data indicated consumer spending increases in services and goods, which should bode well for minority firms.
He cited vital contributions in motor vehicles and parts, recreational goods and vehicles, furnishings and durable household equipment, and gasoline and other energy products in the goods sectors. Black firms are broadly represented in those areas except for energy.Furthermore, he said the rise in private inventory investment reflected increases in wholesale trade and retail trade industries. “Retail trade represents 38% of Black and other minority employer firms, highlighting its importance to minority communities, so growth in retail should support increased minority business economic activity as well.”
However, Cunningham stressed that the benefits of growth are not equitably distributed. Minority-owned businesses face increased competition without proportional access to the resources needed to compete effectively.
