Business filings increased in Colorado at the end of 2020, offering encouragement for improving economic conditions in the face of declining employment.
“Despite the sagging economy at the end of the fourth quarter, there are many reasons for optimism,” said Richard Wobbekind, senior economist in the business research division of the Leeds School of Business at the University of Colorado at Boulder.
“But the road ahead of us is likely a long one with respect to regaining out lost jobs,” Wobbekind said.
Jena Griswold, Colorado secretary of state, agreed. “This latest state economic indicators report shows that while we have seen improvement in our economy since last spring, total recovery remains distant. Colorado’s economy continues to be tested. But with slow and steady gains, there is still reason for Coloradans to be optimistic that improvement will continue into 2021.”
According to a report compiled by the Leeds School of Business based on statistics from the Colorado Secretary of State’s office, initial filings of new companies, corporations, nonprofit organizations and other entities rose during the fourth quarter of 2020 compared to same quarter in 2019.
A total of 34,630 new entity filings were recorded during the fourth quarter of 2020, a 22.1 percent year-over-year increase. New filings for domestic corporations rose 39.3 percent, while new filings for limited liability companies rose 24.5 percent.
For all of 2020, 134,373 new entity filings were recorded. That’s an increase of 5.7 percent over 2019.
New entity filings offer a leading indicator of business growth and jobs.
A total of 148,019 renewals for existing entities were recorded during the fourth quarter of 2020. That’s an 11.5 percent increase over the fourth quarter of 2019. Filings increased for trade names, but slipped for trademarks.
Still, dissolution filings also increased during the fourth quarter — up 8.1 percent from year ago to 10,043. Businesses often file dissolution paperwork after ending operations.
The overall number of companies, corporations and other entities in operation in Colorado continues to increase. For the fourth quarter, there were 803,601 entities in good standing. That’s a 6.9 percent game over the fourth quarter of last year.
Meanwhile, though, labor conditions worsened at the end of 2020.
The statewide seasonally adjusted unemployment rate rose two points to 8.4 percent in December as nonfarm payrolls decreased 20,300 from November.
Over the past year, the state jobless rate has increased four-fold as payrolls have decreased nearly 151,000. Since May, the state has gained back 191,500 of the 342,300 jobs lost during the onset of the pandemic between February and April.