Yelp Economic Average Finds New Business Openings in Q1 2021 Hit Highest Level Since the Pandemic Began

Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today released first quarter 2021 data for the Yelp Economic Average (YEA) report, a benchmark of local economic strength in the U.S. The Q1 2021 YEA shows strong signals of local economic recovery with more new businesses opening than at any other period over the last 12 months and business reopenings at the highest level since Q2 2020.

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Nearly every state in the U.S. saw an increase in new openings in Q1 2021, according to data from the Yelp Economic Average. (Graphic: Business Wire)

YEA found that more than half a million new businesses opened in the U.S. in the last year (April 1, 2020 - March 31, 2021), down by only 11% year-over-year (YoY). New business openings spiked in Q1 2021, with restaurant and food business openings, as well as home, professional, local and auto services openings above Q1 2020 levels. Business reopenings are also rising across the country with reopenings in each month of the first quarter the highest they have been since Q2 2020. Yelp data also finds evidence of the pandemic home buying frenzy through new business openings and consumer interest changes in real estate and home services categories.

“After a challenging year, 2021 is off to an encouraging start for the local economy, with Yelp data signaling a recovery as new business openings and business reopenings soar in the first quarter,” said Justin Norman, Yelp’s vice president of data science. “Yelp data shows a sharp increase of business reopenings in Q1 – with reopenings hitting its highest levels since August 2020. New business openings also spiked between January and March 2021, with new openings for many categories above prior year levels. Along with a downward trend of nationwide COVID-19 cases and an increase in vaccinations, these are all promising signs of rebounding local economies.”

More Than Half a Million New Businesses Open in the Last Year

In the last 12 months, Yelp data reveals there were 516,754 new business openings in the U.S. (April 1, 2020 through March 31, 2021), down by only 11% YoY. Of the newly opened businesses, 69,001 were restaurant and food businesses, down by 14% YoY.

In professional, local, home and auto categories, 272,749 new businesses opened in the last 12 months, up by 2% YoY. Home services openings were 165,006 for the year (up 5% YoY), local services openings were 54,369 (up 3%), professional services openings were 51,839 (up 2%), and auto openings were 34,282 (down 4%).