A decline in new business filings in Colorado could portend slower growth in the face of mounting challenges.
“Businesses have expressed concern about the impacts of increased inflation as well as supply chain constraints at a time when consumer demand for goods and services is increasing. COVID-19 variants and worker shortages also remain a concern,” said Rich Wobbekind, senior economist and faculty director of the business research division of the Leeds School of Business at the University of Colorado.
The division compiles quarterly reports on business filings based on statistics from the Colorado Secretary of State’s Office.
For the third quarter, 38,211 new business filings were recorded. New filings fell 2.6 percent from the second quarter and 1.2 percent from the third quarter of 2020.
New filings constitute a leading indicator of business and job growth.
Other indicators, including gross domestic product and employment, reflect continued growth.
“While our economy continues its recovery with gains in GDP and job growth, too many Coloradans are still struggling to afford housing, child care, health care and monthly bills,” said Jena Griswold, Colorado secretary of state. “While the signs of recovery are encouraging, we still have a long road ahead until the recovery is felt by all Coloradans.”
For the third quarter, filings for limited liability companies fell 1 percent compared to a year ago. Filings dropped 17.2 percent for corporations and 4.5 percent for nonprofits.
For the 12 months ending in the third quarter, 156,833 new entity filings were recorded. That’s an increase of 21.5 percent over the same span a year ago.
A total of 162,260 renewals for existing entities were recorded in the third quarter, up 7.9 percent from last year. Renewals increased 11.1 percent for limited liability companies and edged up three-tenths of a percent for corporations, but slipped a tenth of a percent for nonprofits.
For the 12 months ending in the third quarter, 639,244 renewals were recorded, up 5.6 percent from the same span a year before.
Dissolution filings also increased in the third quarter, however, climbing 8 percent from a year ago to 9,137.
For the 12 months ending in the third quarter, 39,094 dissolution filings were recorded. That’s up 9.8 percent from the same span the year before.
The overall number of companies, corporations and other entities continues to increase in Colorado. For the third quarter, there were 840,905 entities in good standing in the state, up 7.8 percent from last year.
Gross domestic product, the broad measure of goods and services produced in the state, increased 11.8 percent between the second quarters of 2020 and 2021.
Nonfarm payrolls grew 102,100 between September 2020 and 2021, a 3.9 percent increase.
Prices also have climbed, however. Home prices in Colorado rose 13.8 percent between the second quarters of 2020 and 2021. Retail gasoline prices have increased 58 percent year over year.