The Sun Belt economy appears to be a haven for minority businesses, with communities in the South and West dominating among locations for black-owned firms, according to a new study.
The Los Angeles metropolitan area leads the nation with 24.9 black-owned businesses per 1,000 black residents, the study by William O'Hare of the private Population Reference Bureau shows.
But the South is also home to the metropolitan area with the worst showing of black businesses, with 6.9 black companies per 1,000 black residents in Birmingham, O'Hare reported in the July edition of American Demographics magazine.
Overall, the general business climate of a community seems to have a strong effect on the prevalence of black businesses, he wrote in the magazine specializing in population issues.
Cities where black businesses make a strong showing seem to have growing economies, while those near the bottom of the list have either faced economic problems in recent years or have not shared the economic growth of other areas.
After Los Angeles, San Francisco placed second on the black-business rating scale, and San Diego was No. 5, O'Hare reported.
"This suggests that California is indeed a land of opportunity for blacks seeking a foothold in business," he said.
Washington and Houston rounded out the five metropolitan areas with the largest share of black businesses.
The strength of the black business community in Houston may have been affected by the economic turmoil from the recent slump in oil prices, O'Hare said in an interview. But because it is so high on the list, Houston likely is still among the leading communities for black businesses, he said.
O'Hare said he found black businesses least represented in industrial areas suffering economic problems and older southern communities that have not shared in the full growth of the Sun Belt in recent years.
Communities such as Buffalo, Newark, Philadelphia and Chicago were affected by the recession in the last few years with a "black labor force dependent on wage labor in heavy industry and a local economy dominated by large manufacturing firms," he said.
Other cities at the bottom of the list, such as Birmingham, Mobile, Ala., Shreveport, La., and Memphis, "are all older cities in the Deep South where the education, training and probably the business skills of blacks are among the lowest in the nation," he reported.