A high number of new business filings in Colorado in the first quarter this year helped put the state back on a normal growth rate post pandemic, according to the latest data shared by the Secretary of State’s Office on Monday.
More than 48,600 businesses started up during the quarter, up 19% from the December quarter. That was the highest quarterly number since second quarter 2023, when the state offered a filing fee discount to reinvigorate small business post COVID.
But the gain was probably more about seasonality than anything else, said Brian Lewandowski, executive director of University of Colorado’s Business Research Division at the Leeds School of Business, which works with the secretary of state to produce the quarterly report.
“It’s a seasonal pattern,” Lewandowski said. “In fact, when I look back over time from 2005 and onward, it’s even a little bit lower than the average increase (of) 23% or 24%. The point is, this is the usual increase.”
Richard Wobbekind, a senior economist at Leeds who works with Lewandowski, called the uptick “encouraging, especially in light of the current uncertain economic environment.”
On the other hand, the number of companies that filed to dissolve their business also increased, to 16,929, just barely up 0.7% from a year ago. But the number of companies in good standing continued to grow, up 1.1% from a year ago to 973,615 at the end of March.
Whether folks are starting a new business because of a lost job or the uncertainty they feel about the economy, other economic indicators seem to have Colorado holding steady with no large increases or declines.
Job growth continues, though the 2,300 jobs gained in March from a year ago was a mere 0.1% growth. Colorado’s unemployment rate of 4.8% in March was higher than the nation’s 4.2% in April. The state still has a high level of adults who work, ranking sixth highest nationwide for its labor force participation rate, at 67.8%.
Lewandowski said that he feels the job growth numbers are underrepresented based on how the Bureau of Labor Statistics is analyzing the data. According to his division’s forecasts, they’re projecting meager job growth for the next two quarters in Colorado.
“Some of our models even have a loss of jobs. But that’s not our baseline forecast,” he said. “There are scenarios where, if we enter into a recession, we actually could see some job loss. But I’m not quite there yet. I think we could see some really thin job growth later this year.”