Phil Castle, The Business Times
The latest numbers for business filings in Colorado offer encouragement the state is well-positioned to recover from the coronavirus pandemic. It remains uncertain, however, how long recovery could take.
“We still have a long, long way to go,” said Richard Wobbekind, a senior economist and faculty director of the Leeds School of Business at the University of Colorado at Boulder.
According to a report compiled by the Leeds Business Research Division based on statistics from the Colorado Secretary of State’s office, initial filings of new companies, corporations, nonprofit organizations and other entities dropped during the second quarter compared to the same span last year. But renewals by existing businesses and other entities increased.
Jena Griswold, Colorado secretary of state, said the numbers bode well for the state economy. “We’re faring better overall than the national economy.”
A total of 31,221 new entity filings were recorded during the second quarter of this year. That’s a decrease of nearly 7.8 percent from the first quarter and 1.7 percent from the second quarter of last year. While new entity filings typically decline during the second quarter, Wobbekind and Griswold also attributed the latest drop to the effects of the coronavirus pandemic and related closures and restrictions.
A total of 152,420 renewals for existing entities were recorded for the second quarter of this year. That’s an 11.5 percent decrease from the first quarter, but a 12.2 percent increase over the second quarter of last year. Filings for trademarks and trade names also increased on a year-over-year basis. “This is very encouraging,” Wobbekind said.
Still, dissolution filings also increased during the second quarter — up to 5.2 percent to 8,659.
The overall number of companies, corporations, nonprofits and other entities in operation continues to increase. For the second quarter, there were 757,612 entities in good standing. That’s an increase of 4.2 percent over the same quarter last year.
Other economic indicators also reflect the effects of the pandemic and the outlook for recovery, Wobbekind and Griswold said.
For June, the latest month for which estimates are available, the statewide seasonally adjusted unemployment rate increased three-tenths of a point to 10.5 percent.
Since May, Colorado payrolls have regained 126,000 of the 343,300 jobs lost between February and April. Compared to a year ago, though, payrolls have decreased 183,000 with the biggest losses in the leisure and hospitality; trade, transportation and utilities; and education and health services sectors.
Griswold said Paycheck Protection Program loans helped businesses keep more people employed.
Both Griswold and Wobbekind called for additional federal stimulus to help businesses and individuals.
Wobbekind said some sectors were more affected the pandemic than others. But every sector has been affected. “Nothing has gone unscathed.”
The Leeds Business Confidence Index, a measure of optimism among business leaders cross Colorado, rebounded to 44.3 for the third quarter. That’s up 14.6 points from a record low 29.7 for the second quarter. However, readings below 50 reflect more negative than positive responses.
Griswold said the prospect for recovery depends on a number of factors, not the least of which is management of the coronavirus. But the Colorado economy is diverse and Coloradans resilient, she said.
Wobbekind said one silver lining for Mesa County and other areas of the state could be increased interest among businesses in relocating to less urban settings. “This could be very promising for some rural areas of Colorado.”