Colorado business filings were undercut by COVID-19 in the first quarter of 2020, according to a University of Colorado Boulder report Colorado Secretary of State Jena Griswold released on April 29, 2020.
The Quarterly Business and Economic Indicators report is prepared by the Leeds Business Research Division (BRD) at CU Boulder. The latest report shows 33,848 new corporations, nonprofits and other entities filed initial documents with the secretary of state’s office in the first quarter of this year. That marks a 5.6% decline in new entity filings year-over-year.
Existing entity filings rose 7.8% year-over-year, with 172,267 entities filing renewals.
“Before the pandemic, Colorado’s economy was outperforming the nation. Now, unemployment more than doubled in a month and many small businesses are struggling to keep their doors open,” said Secretary Griswold.
A Denver coffee shop open for limited business. (CU Boulder/Andrew Sorensen)
The rest of the filings show mixed results.
First quarter dissolution filings increased 6% from the first quarter of 2019. They fell 11.5% from the previous quarter. Trademarks (-15.7%) and trade name (-9.3%) filings also dropped sharply.
Entities in good standing declined 1% from the fourth quarter of 2019.
Colorado’s economy in 2020
“Business filings are often an early indicator of job growth,” said Rich Wobbekind, senior economist and faculty director of the Leeds Business Research Division. “The data clearly illustrates the deterioration in Colorado’s economic growth caused by this pandemic. How badly it is affected will depend on how long this goes on.”
Economic data lags the fast-moving real world scenario COVID-19 is presenting. While the most recent U.S. and Colorado gross domestic product (GDP) numbers reflect growth (2.1% and 3.4% year-over-year, respectively), projections for the future predict a double-digit drop.
Unemployment data for the five weeks preceding April 18 shows Colorado experienced more than 300,000 initial jobless claims— roughly equivalent to the state’s last three years of claims.
Colorado business confidence for the second quarter of 2020 is at an historic low, according to the latest Leeds Business Confidence Index (LBCI). Though the LBCI does recover somewhat looking to the third quarter of 2020, indicating confidence in the strength of Colorado’s economy going into the crisis and its ability to rebound.
Building permits decreased 1.6% year-over-year in February, according to the report, though the value of building permits increased 1.1%.
