17.0% of New Businesses Are Construction: USTA Index

This is the launch of the USTA New-Business Formation Index — a sealed, daily-updated census of new business registrations drawn from open municipal datasets across 4 tracked metros: Chicago, IL, Los Angeles, CA, New York City, NY, San Francisco, CA.

The June 2026 edition sealed 9,442 distinct new business registrations across that metro set, spanning March 28, 2026 through June 25, 2026. This is a census of those four municipal datasets, not a national new-business total and not a state-level count. It must never be presented as either. Among the 9,442 registrations, 68.6% carry a NAICS code — those 6,473 coded records are the basis for the sector mix below.

Reading the Construction Lead: Two Metros, One Signal

Across the two NAICS metros in this index — Los Angeles and San Francisco — Construction dominates the sector mix at 17.0% of coded registrations. That figure represents 1,098 new business registrations in the Construction sector, the highest count of any tracked sector. What makes it worth examining is not just the number, but what it implies about which kinds of new entrants are formally registering.

Licensed contractor firms, specialty trade subcontractors, and residential-renovation businesses all pass through the municipal registration system because their work requires a local license to operate legally. When Construction leads a formation census, it typically means the physical economy — renovation, new construction, tenant improvement — is generating a steady flow of new formal entrants who might otherwise stay informal. For B2B vendors, this is an early-signal market: these firms are forming, not yet equipped.

The second-largest coded sector, Retail Trade at 13.0%, tells a different story. Physical and online storefronts register at the municipal level to operate; their appearance alongside construction contractors at nearly the same scale confirms the index is capturing both the trade economy and the consumer economy simultaneously. The sectors further down the list — food service at 12.2%, professional services at 11.7% — round out a picture of urban entrepreneurial activity that spans hands-on trades, storefronts, and knowledge-economy practices in roughly the same proportion.

Construction accounts for 17.0% of coded new registrations across the 4 tracked metros.

The Index at a Glance

The 68.6% NAICS coverage reflects a structural feature of the tracked metro set: Los Angeles and San Francisco publish NAICS codes on their records, while Chicago and New York City publish free-text licensed-activity descriptions instead. The Chicago and NYC filings (1,948 and 303 respectively) appear in the 9,442 total but are not reflected in the NAICS sector table. This is not a data-quality issue — it is a dataset-design difference between the two types of municipal filing systems. The Los Angeles formation report and San Francisco formation report cover the NAICS-coded metros in detail.

The NAICS coverage percentage will change as the clock tracks additional NAICS-coded metros in future editions. For this inaugural snapshot, 68.6% reflects the share of the 9,442 total filings that carry a code — all concentrated in the two California metros. Nothing is estimated or modeled; the uncoded records simply come from datasets that do not carry a NAICS field.

1,098 Construction registrations lead the sector mix in this inaugural formation snapshot.

NAICS Sector Mix Across Coded Registrations

The sector table below covers the 6,473 NAICS-coded registrations from Los Angeles and San Francisco. Sector labels are copied verbatim from the 2-digit NAICS classification read from each record's own code. No re-coding has been applied.

Construction's lead at 17.0% reflects the combined weight of both NAICS metros — LA at 14.8% Construction share and San Francisco at 21.6%. The wider Construction lead in San Francisco amplifies the sector's presence in the combined index figure. If the metro mix changes in future editions, this figure will shift accordingly; no stability claim is possible from a single edition.

Retail Trade (13.0%) and Accommodation & Food Services (12.2%) occupy the second and third positions respectively. Their close grouping alongside Construction suggests the physical economy of building, buying, and eating drives the bulk of formal new-entrant registrations in these urban markets. Professional, Scientific & Technical Services at 11.7% represents the knowledge economy sitting just below consumer-facing trades — consultants, engineers, legal practices, and IT services.

Other Services at 9.4% covers personal-care, automotive-repair, pet, and similar local-service businesses. Health Care & Social Assistance at 6.3% reflects care practices and social-service organizations. Real Estate & Rental/Leasing at 4.9% and Arts, Entertainment & Recreation at 4.7% round out the distribution.

The NAICS sector mix captures only formal municipal registrations for new entrants in these sectors — not every business operating in the sector. A hair salon that has operated informally for years and files for the first time appears here; a large enterprise already registered does not. The index measures the new-entrant stream, which skews toward sole proprietors, small LLCs, and early-stage operators making their first formal commitment to a sector.

The Metro Leaderboard: Four Cities, One Snapshot

The index covers 4 metros. Los Angeles and San Francisco report NAICS-coded sectors; Chicago and New York City report free-text licensed activities. The two classification systems are not directly comparable on sector mix — filings are comparable on count alone.

Los Angeles carries the largest filing volume of any tracked metro by a wide margin. San Francisco's NAICS coverage at 77.9% is lower than LA's 97.1%, meaning a higher share of San Francisco's filings appear in the total count but not the sector table. Chicago's top licensed activity — "180 Day Multiple Events - Special Event Food" — reflects the city's permit structure for food vendors at temporary events, which appears differently from a NAICS classification.

New York City's top activity — "Home Improvement Contractor" — aligns with the construction-adjacent signal visible in the NAICS metros, even through a different classification lens. Metro-specific posts for Chicago and New York City explore those activity-labeled datasets directly.

9,442 total new business registrations span 4 tracked municipal datasets.

How the Index Is Built and What It Covers

Source: US Tech Automations business-formation clock (new-business registrations from open municipal Socrata datasets, captured daily and content-hashed).

Scope statement: New business registrations (the new-filing stream, excluding renewals) captured from the open municipal business-license datasets of Chicago, IL, Los Angeles, CA, New York City, NY, San Francisco, CA by our business-formation clock between June 26, 2026 and June 26, 2026. This is a census of those four municipal datasets, not of every business formed in the United States or in any single state.

Honesty statement: Every count is a verbatim count of distinct business registrations the clock actually captured; nothing is estimated, modeled or extrapolated. Each formation is counted once at first observation. NAICS sectors are grouped from the first two digits of each record's own NAICS code (SF and LA carry NAICS; Chicago and NYC publish a free-text activity, summarized separately). Figures describe the tracked metros only and must never be presented as a city-wide, statewide or national total.

NAICS coverage note: The sector table covers only the 6,473 records that carry a NAICS code — 68.6% of the 9,442 total filings. The remaining records (from Chicago and NYC, plus a share of uncoded records from the California metros) appear in the filing total only. No sector has been inferred for uncoded records.

This is a cross-sectional, single-edition snapshot. The clock is new; no prior monthly observations exist. No month-over-month, year-over-year, trend, or growth claims are possible or intended from this inaugural edition.

Collection steps:

1. Collect. The clock queries each metro's open municipal Socrata dataset daily, pulling new-filing records by registration date.

2. Normalize and deduplicate. Each registration receives a unique identifier across the full dataset. Records already observed in a prior daily pull are excluded — each business is counted once, at first observation, across all four metros.

3. Classify. For NAICS metros (LA and SF), the first two digits of each record's own NAICS code determine the sector assignment. For activity metros (Chicago and NYC), the free-text licensed-activity label is preserved verbatim.

No NAICS sector is inferred for activity-labeled records.
4. Seal. The daily aggregate is content-hashed and appended to the time-series store. Snapshot SHA: b67b5cf69feaa9f73bc4ef1cfe3269ce881ca2f3f1a898648e2e61f7d660dc57.

Frequently Asked Questions

Q: Is 9,442 the total number of new businesses formed nationally during this period?
A: No. The 9,442 count is a census of the four tracked municipal datasets only — Chicago, IL, Los Angeles, CA, New York City, NY, and San Francisco, CA. It is not a national total, not a state-level total, and not a count of all businesses in any of those cities. Businesses registered through state-level entities without a municipal filing in one of these four cities are not in this dataset.

Q: Why does the index cover only 4 metros?
A: The clock currently ingests the open municipal Socrata datasets from 4 cities that publish business-license registration data in a format the clock can consume daily. Coverage will expand as additional municipal datasets are added. The scope statement will update with each edition to reflect which metros are tracked.

Q: Why does the NAICS sector table show 68.6% coverage but not all 9,442 filings?
A: Chicago and New York City publish a free-text licensed-activity description, not a NAICS code. Their combined filings — 1,948 and 303 respectively — appear in the 9,442 total but cannot be assigned to a NAICS sector without inferring a classification. No inference has been made. Additionally, a share of filings from the California metros carry no NAICS code in the source data. The 68.6% represents the fraction of all 9,442 registrations that arrive with a code already attached.

Q: What does it mean that Chicago's top licensed activity is "180 Day Multiple Events - Special Event Food"?
A: Chicago's municipal licensing system uses free-text activity labels — not NAICS codes — to describe each business's permitted activity. "180 Day Multiple Events - Special Event Food" is a verbatim label from that system; it represents vendors licensed to operate food service at multiple events within a 180-day period.

This is a classification artifact of Chicago's permit structure, not a statement that food vendors are the most common new business type in the city. The Chicago metro post covers the activity-labeled dataset in detail.

Q: When will the index have historical data to show trends?
A: This is the first sealed edition of the USTA New-Business Formation Index. No prior editions exist to compare against, so no month-over-month, year-over-year, or trend claims are possible. Future editions will be sealed on the same monthly cadence and published with the same methodology; trend analysis will become possible once multiple editions accumulate.

Q: How is a sealed snapshot different from querying the live municipal dataset today?
A: A sealed snapshot is a content-hashed aggregate produced from a specific daily pull on June 26, 2026. The hash ties the published figures to the exact underlying dataset at that moment. Running the same query against the live municipal dataset on a later date could return different results as new records arrive or existing records update.

The sealed figures in this report are fixed and will not change. See the AI Price Index for an example of the same sealed-snapshot methodology applied to a different data stream.

Put Formation Index Data to Work

The index's sector distribution — and the metro leaderboard behind it — are actionable signals for three buyer types operating at scale.

B2B revenue teams prospecting newly registered firms use the Construction sector's 1,098 filings as a pipeline source across two of the country's largest metros. Rather than purchasing stale contact lists, they monitor the formation feed daily and route first-touch outreach within hours of a new Construction, Retail Trade, or Professional Services registrant appearing. The index tells them which sectors are producing the highest volume; the metro-level reports give them the geographic slice they need for territory-based sales teams.

Business insurers and financial-services onboarding teams use the sector mix to understand where new-client volume is concentrating. A firm that writes general-liability policies for construction contractors knows, from this snapshot, that 1,098 new contractor entities registered across LA and SF in this period — each a potential first-policy client. A bank's small-business onboarding team can prioritize outreach by the sectors most likely to need business checking, merchant accounts, or SBA loan referrals.

Market intelligence and commercial research teams use the index as a cross-metro leading indicator of small-business formation patterns in major urban markets. The sector percentages — Construction at 17.0%, Retail at 13.0%, Food at 12.2% — provide a baseline for each future edition; analysts watching for structural shifts in the entrepreneurial economy will have a sealed, verifiable reference point to compare against when subsequent editions are published.

US Tech Automations automates the monitoring loop: the clock watches each city's municipal feed daily, flags new registrations by sector, routes signals to CRM, and drafts first-touch outreach — so commercial teams act on fresh formation data without manual dataset pulls.

Start routing formation signals automatically

Source: US Tech Automations Research — computed from the sealed daily business-formation snapshot, June 26, 2026.