New business filings slow, but Colorado growth expected to continue

The pace of new businesses opening in Colorado has slowed to its lowest level in four years, but other indicators signal continued job and economic growth.

Richard Wobbekind

“Although slowing is the word of the day, Colorado still has one of the stronger economies in the U.S. with year-over-year employment growth at 2 percent,” said Richard Wobbekind, executive director of the research division of the Leeds School of Business at the University of Colorado at Boulder.

The division prepares quarterly reports based on information from the Colorado secretary of state’s office.

“I am happy to see that Colorado’s economy should grow through the end of the year and into 2020 even as business leaders are more pessimistic with economic uncertainty,” said Jena Griswold, secretary of state.

Jena Griswold

Corporations, nonprofits and other entities filed a total of 31,105 initial documents with the secretary of state’s office during the third quarter. That’s a decrease of 2.1 percent from the second quarter. At just a three-tenths of a percent increase over the third quarter of 2018, year-over-year growth in new entity filings slowed to its lowest pace in four years.

Existing entity filings remain strong, however, with 142,020 third quarter filings. That’s a 4.5 percent increase over the second quarter and 3.9 percent increase over the third quarter of 2018.

A total of 7,672 dissolution filings were reported for the third quarter of 2019. That’s a decrease of 6.8 percent from the second quarter, but an increase of 3.7 percent from the third quarter of 2018.

The analysis of third quarter filings signals continued employment growth in Colorado over the next six months.

For the year ending with the third quarter, 127,192 new entity documents were filed with the secretary of state’s office, a 1.5 percent over the same span in 2018. There were 571,833 existing entity renewals in the third quarter of 2019, a 5.2 percent gain over the same span in 2018.

Counting the latest numbers, there were 735,880 entities in good standing in Colorado in the third quarter of 2019. That’s a 3.4 percent increase over the span in 2018.

Meanwhile, the latest results of a separate quarterly survey revealed Colorado business leaders were less optimistic about the economy, sales and other aspects of their operations heading into the fourth quarter. At 46.9, the overall reading for the Leeds Business Confidence Index fell below neutral 50 for the first time since 2011.

The statewide seasonally adjusted unemployment rate has dropped eight-tenths of a percent to 2.7 percent over the past year even as nonfarm payrolls have increased 56,900. In Mesa County, the seasonally unadjusted jobless rate dropped seven-tenths of a point to 2.5 percent in September, the lowest level on record.