Leaving many unfilled job openings behind them and ignoring the economic storm clouds ahead, Coloradans put new business start-ups on hold last quarter, according to a report by Colorado Secretary of State Jena Griswold and the University of Colorado Boulder’s Leeds. Business Research Division.
Time will tell if the state is witnessing an Armada of businesses or researchers heading for a brighter economic future, but an unprecedented 48,806 applications were made in the quarter fourth, a 37.2% increase in the quarter of 2021 and an 11.8% jump from the third quarter.
Most of the filings in the fourth quarter, 42,003, were for limited liability companies, a type of business favored by a single owner. It rose 50.2% last year, more than three times the 15.2% annual growth rate averaged over the past five years.
For the year, there were 175,650 new business documents in 2022, an increase of 11.5% compared to 2021.
“With another strong year of job gains and continued job growth, new business filings are growing at a record pace and inflation is slowing faster than the national average, Colorado continues to lead when it comes to business ownership and management,” Griswold said in comments. with quarterly updates.
New business documents reveal hope for the future. Few people will do business when they think the bottom is ready to leave the economy and their efforts will be wasted. A large percentage of startups will reach a point where they can add jobs, so the conditions are a good predictor of future job growth.
That is, the choice is not always voluntary, and the period of large layoffs often coincides with the growth of business startups. But that is not the case today. The state’s unemployment rate ended 2022 at a historic low of 3.3% and employers added a net 8,600 jobs last month and 104,700 last year. , a very strong showing, according to the Colorado Department of Labor and Employment.
There are plenty of jobs for those who want to work, and employers are eager to hire. So why start a business, especially when supply issues are still a problem, money is more expensive to borrow and some forecasts call for a recession this year?
One factor that hasn’t raised its head in four decades is inflation, which ran at a 6.9% pace in November in metro Denver. Higher prices may force more people to look for ways to increase income. Starting a business or side gig can be more fulfilling and rewarding than taking on a second job.
It is also worth noting that the government has proposed a break in business fees for new companies, lowering them from $ 50 to $ 1. But considering the amount of money and effort required to establishing a legal company, may not be a decisive decision of the $49 stock.
Indicators of economic distress have also risen. The liquidation of companies increased by 13,293, a gain of 17% during the year, while the number of delinquent companies increased by 9.7% during the year to 798,981. But these gains were not matched by the level of confidence shown in new business growth.