While a record 44,740 new businesses and nonprofits filed initial documents with the Colorado Secretary of State in the first quarter of this year, 37,820 businesses filed dissolutions in the past 12 months, according to the Quarterly Business and Economic Indicators report released this week.
The report details the COVID-19 pandemic’s devastating effect on the leisure/hospitality industry, which hemorrhaged 72% of all the jobs lost from February to March 2020, according to the U.S. Bureau of Labor Statistics.
“A year later, the industry continues to face an uphill battle; 46.2% of jobs lost year-over-year are concentrated in the sector,” according to the report prepared by the Leeds Business Research Division (BRD) at CU Boulder and the Secretary of State’s Office.
“While business closures during the pandemic will have a lasting impact on job supply in the industry, a return to travel and tourism in Colorado will be critical to the state’s employment recovery.”
The record-setting new business filings number was 29% higher than Q4 — which the report notes “demonstrates a spike beyond trend growth” — and 1% over 2020 Q1. Officials said Q1 typically has the highest number of new filings anyway.
“Colorado is poised to make a full job recovery from the recession by 2022. But many Coloradans still are struggling from job loss due to COVID-19,” said Colorado Secretary of State Jena Griswold in a statement. “The state’s economy is building momentum, and I am hopeful that it will continue.”
The number of dissolutions in Q1 — 10,658 — also set a record and was up 6% year-over-year. However, the report notes the pace of dissolutions slowed considerably from 2020.
“The spike in dissolutions during the last recession occurred after the official end of the recession in 2011,” according to the report.
Colorado recorded 376,300 jobs lost in February-April 2020, but 229,600 jobs were added back from May 2020 through March 2021, for a net loss of 146,700 jobs.
The report predicts the state will add 90,000 jobs in 2021, with continued growth into 2022.
“This growth trend in the labor force could lead to a full jobs recovery from the recession in 2022,” said Brian Lewandowski, Executive Director of BRD, in a statement. “But there are other statistics that show Colorado still has some progress to make in economic recovery.”
Some other interesting information nuggets from the report:
- Colorado’s labor force growth ranked first in the country
- Our per-capita personal income average is 10th-highest at $63,123
- The state’s 6.4% unemployment rate, higher than the 6% national average, ranks 34th
- Slight uptick in the state’s energy economy, as the number of rigs in Colorado increased from an average of 7 in December 2020 to 10 in April 2021. “While this is significantly lower than an average of 30 rigs in 2019, the jump reflects a positive trend from recession lows,” the report states.
A copy of the full report is here.