An increase in business filings in Colorado bodes fell for improving economic conditions in the aftermath of a pandemic, but some industry sectors continue to face challenges.
“Colorado is poised to make a full job recovery from the recession by 2022. But many Coloradans still are struggling from job loss due to COVID-19,” said Colorado Secretary of State Jena Griswold. “The state’s economy is building momentum, and I am hopeful that will continue.”
Brian Lewandowski, executive director of the businesses research division of the Leeds School of Business at the University of Colorado at Boulder, offered a similarly mixed assessment.
“This growth trend in the labor force could lead to a full jobs recovery from the recession in 2022,” Lewandowski said. “But there are other statistics that show Colorado still has some progress to make in economic recovery.”
According to a report compiled by the businesses research division of the Leeds School of Business based on statistics from the Colorado Secretary of State’s office, initial filings of new companies, corporations and nonprofit organizations rose during the first quarter of 2021 compared to the same quarter in 2020.
A total of 44,740 new entity filings were recorded during the first quarter of 2021, a 32.2 percent year-over-year increase. New filings for domestic corporations rose 38.9 percent, while new filings for domestic limited liability companies rose 35.4 percent.
New entity filings tend to increase in the first quarter, but the latest gain exceeded the long-term trend.
For the 12-months ending with the first quarter of 2021, a total of 149,271 new entity filings were recorded, an increase of 19.3 percent over the previous 12-month period.
New entity filings offer a leading indicator of business and job growth.
A total of 173,970 renewals for existing entities were recorded during the first quarter of 2021, up 1 percent from a year ago. Renewals increased for domestic limited liability companies, but decreased for domestic corporations.
For the 12 months ending in the first quarter, 624,811 renewals for existing entities were reported, up 7.2 percent compared to the previous 12-month period.
Dissolution filings also increased in the first quarter of 2021, however, climbing 2.9 percent over the past year to a record 10,658. For the 12 months ending in the first quarter, 37,820 dissolution filings were recorded. That’s an increase of 6.2 percent.
A spike in dissolutions also followed the official end of the recession in 2011.
The overall number of companies, corporations and other entities in operation continues to increase in Colorado. For the first quarter of 2021, there were 812,704 entities in good standing. That’s a 9.2 percent increase over the same quarter in 2020.
Lewandowski said the business research division projects the addition of 90,000 jobs in Colorado in 2021 with continued growth in 2022. The state ranks first in the country for labor force growth and 10th for per capita personal income of $63,123.
However, the latest monthly seasonally adjusted unemployment rate of 6.4 percent ranks 34th. And growth in average hourly wages ranks 46th. The leisure and hospitality sector, which accounts for nearly half the 133,900 jobs lost over the last year, continues to face challenges.
The number of oil and natural gas drilling rigs in operation in Colorado increased from an average of seven in December to 10 in April. Still, that’s only a third of the average of 30 rigs in operation in the state in 2019.