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Small Business Closure Rates Drop, but It Is Too Early to Call It a Recovery
While the overall business closure rate fell to 8.64% in 2025, the rate for six major small business sectors stood at 11.08%. This article compares overall and sector-specific trends over the past three years, distinguishes between the number and proportion of business closures due to sluggish performance, examines the decline in the number of food service businesses and sample limitations of surveys, and sets forth conditions for interpreting the drop in closure rates as business recovery.
While the overall business closure rate fell to 8.64% in 2025, the rate for six major small business sectors stood at 11.08%. This article compares overall and sector-specific trends over the past three years, distinguishes between the number and proportion of business closures due to sluggish performance, examines the decline in the number of food service businesses and sample limitations of surveys, and sets forth conditions for interpreting the drop in closure rates as business recovery.
Small Business Closure Rates Drop, but It Is Too Early to Call It a Recovery Sector gaps and interpretation conditions for the decline in business closures based on 2025 statistics If the number of businesses shutting down has decreased, can we consider the small business economy to have recovered? According to an analysis of National Tax Service statistics released by the Ministry of SMEs and Startups (MSS) on June 30, 2026, the overall business closure rate for 2025 dropped compared to the previous year, standing at 8.64%. However, the closure rate for six major sectors heavily populated by small businesses was 11.08%, exceeding the overall average. To understand recent trends, it is necessary to examine the decline in closures separately from the financial health of surviving businesses. KBR ANALYSIS Closure rates have declined. Disparities among sectors remain. All Businesses in 2025…
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