Phil Castle, The Business Times

A record number of new business filings in Colorado bodes well for what’s expected will remain a growing economy, although other indicators signal what could be a slowing pace.

The secretary of state’s office recorded 55,787 new entity filings during the first quarter — a 27.6 percent increase over the same quarter last year to the largest amount ever reported.

A credit that reduced filing fees for limited liability corporations to $1 likely contributed to the increase. But new filings also constitute a leading indicator of subsequent business and job growth.

“Colorado continued on an upward trajectory to begin 2023 even as economic uncertainty has gripped much of the rest of the nation,” said Jena Griswold, secretary of state.

Brian Lewandowski, executive director of the business research Division at the Leeds School of Business at the University of Colorado at Boulder, said other indicators reflect signs of weakness in the Colorado labor market.

While the unemployment rate remains low, year-over-year growth in nonfarm payrolls slowed to 1.2 percent in March, the latest month for which estimates are available. Colorado dropped from a top 15 state nationally for employment growth to next to last ahead of only West Virginia, Lewandowski said. “That’s a real notable slowdown.”

The business research division prepares quarterly business and economic indicators reports based in part on filings with the secretary of state’s office.

New entity filings increased 14.3 percent between the fourth quarter of 2022 and first quarter of 2023, building on what also were record-level filings for the fourth quarter. Over the past year ending in the first quarter, 187,716 new entity filings were recorded. That’s an increase of nearly 20 percent over the previous year-long span.

Another 194,062 existing entity renewals were recorded for the first quarter, up 1.2 percent from the same quarter last year. For the year ending in the first quarter of 2023, 701,185 existing entity renewals were recorded. That’s an increase of 3.8 percent from the previous year-long span.

However, dissolution filings also reached a record-high 13,999 in the first quarter of 2023, a 9.1 percent increase over the first quarter of 2022. For the year ending in the first quarter of 2023, 50,661 dissolutions were recorded, a 19 percent increase over the same span a year before.

A total of 926,076 companies, corporations and nonprofit organizations remained in good standing in the first quarter of 2023, up 7.4 percent from a year ago.

Griswold said the numbers were encouraging. “Colorado continues to be a great state to stay in business as well as start a business.”

Lewandowski said the national economy shows signs of slowing. Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of 1.1 percent in the first quarter. That follows 2.6 percent growth in the fourth quarter.

In Colorado, GDP grew at an annual rate of 2.7 percent between the third and fourth quarters.

State labor indicators are mixed, he said.

The seasonally adjusted unemployment rate edged down a tenth of a point to 2.8 percent in March to remain below 3 percent for an 11th straight month. A labor participation rate of 68.3 percent in March ranked fourth-highest nationally, Lewandowski said.

Colorado ranks ninth for highest job opening rate, he said, with an increase in job openings. But there’s an imbalance with more job openings than workers with slowing population growth and migration. “We’re running out of available workers.”

The Consumer Price Index increased 5.7 percent on a year-over-year basis in the first quarter in the Denver metro area.

But housing prices retreated across most of Colorado. A home price index decreased for six of seven metropolitan areas. The only exception was a 0.5 percent increase in the Pueblo area.