The worst of the COVID-19-induced recession may be in the rear-view mirror for Colorado businesses, according to a University of Colorado Boulder report Colorado Secretary of State Jena Griswold released on Aug. 5.
The Quarterly Business and Economic Indicators report is prepared by the Leeds Business Research Division (BRD) at CU Boulder. The report shows 31,761 new corporations, nonprofits and other entities filed initial documents with the secretary of state’s office in the second quarter of this year.
New entities filing with the secretary of state’s office to begin operations declined 1.7% year-over-year. New entity filings typically decline in the second quarter, though combined with COVID-19, filings fell 7.8% from the first quarter of 2020.
Existing entities in good standing (12.2%), trademarks (9.7%) and trade names (1.3%) all increased over the year, reflecting a solid base in the state economy.
“From people falling sick to a 10.5% unemployment rate, Coloradans continue to be impacted by COVID-19,” said Secretary of State Jena Griswold. “Although there are some positive signs, economic recovery is dependent on the management of the virus.”
Dissolution filings increased 5.2% year-over-year. Dissolutions tend to lag behind business woes, according to the report.
The Colorado economy going forward
The BRD pays attention to business filings because they can be an early indicator of business growth trends.
“The strong results for existing entities show Colorado is better positioned for a recovery than many other states might be,” said Richard Wobbekind, senior economist and faculty director of the Leeds Business Research Division. “Though a recovery could be a long and slow journey.”
Optimism among Colorado business leaders is improving, but still negative according to the latest Leeds Business Confidence Index (LBCI). The latest LBCI marked an index score of 44.3 ahead of the third quarter, an increase from a record low in the second quarter.
Colorado’s unemployment rate was 10.5% in June, down from a peak of 12.2% in April.
The state’s personal income grew 3.4% in the first quarter of 2020.
The oil and gas industry is looking at a sharp decline. The Baker Hughes Rig Count, which counts active oil and natural drilling rigs, decreased 81% year-over-year.