The pace of business openings in Colorado as measured by filings with the state government has slowed, although other indicators continue to signal economic growth.
“The slowing growth in new entity filings is consistent with slower growth observed in both firms and employment in the state,” said Richard Wobbekind, executive director of the business research division of the Leeds School of Business at the University of Colorado at Boulder.
Jena Griswold, Colorado secretary of state, said the overall outlook remains upbeat. “With optimism from business leaders on the rise, indications point to Colorado’s economy staying strong in 2020.”
According to the latest report from the business research division at the Leeds School of Business based on information from the secretary of state’s office, 28,371 corporations, nonprofits and other entities filed initial documents during the fourth quarter of 2019. Filings for limited liability corporations and nonprofits increased on a year-over-year basis, while filings for other entities decreased.
Total new entity filings for the fourth quarter were down 8.8 percent from the third quarter and four-tenths of a percent from the fourth quarter of 2018. Over the past five years, though, new entity filings have increased an average of 4 percent a year.
At 132,754, renewals for existing entities also decreased for the fourth quarter of 2019 — down 6.5 percent from the third quarter and 1.1 percent from the fourth quarter of 2018.
At 9,290, fourth quarter dissolution filings jumped 20.4 percent from the third quarter and 4.9 percent from the fourth quarter of 2018.
The overall number of corporations, companies and other businesses in operation in Colorado continues to increase. For the fourth quarter, there were a total of 751,810 entities in good standing. That’s an increase of 2.2 percent over the third quarter and 6.6 percent over the fourth quarter of 2018.
A decline in business openings portends slowing job growth.
There are other signs of slowing in Colorado, according to the report, among them building activity. Nearly 42,000 building permits were issued in the state in 2019, down 7.7 percent from 2018. The total value of residential construction decreased 3.8 percent.
Still, nonfarm payrolls increased 56,600 between November 2018 and December 2019. The statewide seasonally adjusted unemployment rate dropped 1.1 points over the past year to 2.5 percent in December, the lowest level for Colorado for statistics going back to 1976.
In Mesa County, the seasonally unadjusted jobless rate increased two-tenths of a point to 3.1 percent in December. Over the past year, payrolls increased 1,388 or about 1.8 percent.
A measure of confidence among Colorado business leaders also rebounded heading into the new year.
The Leeds Business Confidence Index rose 3.9 points to 50.8 for the first quarter of 2020. The business research division at the Leeds School of Business calculates the index based on the results of quarterly surveys of business leaders in a variety of industry sectors from across Colorado.
For the first quarter, readings advanced for all six of the metrics the index tracks and moved above growth-neutral 50 for all but one of the metrics. Confidence in the Colorado economy climbed to 51.5, 4.1 points higher than the third quarter and a half point higher than the first quarter of 2018.