While Colorado’s economy has mostly recovered from the pandemic, mixed metrics from the Colorado Secretary of State Quarterly Business & Economic Indicators report released Tuesday show growth and shrinkage in important areas.
New business filings with the Secretary of State in the first quarter of 2022 rose from the fourth quarter of 2021, but totals are down year-over-year from the record set during the first quarter of 2021. Overall, more than 43,000 new businesses filed with the secretary of state over the first quarter of 2022. Rates of renewals increased 10.3% over the first quarter of 2021, but rates of dissolution increased 20.4% over that same period.
Brian Lewandowski, executive director of the Business Research Division of the University of Colorado Boulder Leeds School of Business, pointed out that different metrics can tell different stories about the economy’s overall performance.
“When we look at the data, there’s sort of a mixed story,” Lewandowski said.
While not every measurement of the economy shows perfect growth, the overall outlook is much brighter than in April 2021 or 2020.
“Almost any way you cut it, we are in a much better position than we were a year ago or a year and a half ago,” Lewandowski said.
Colorado secretary of state Jena Griswold shares optimism about the economy as the state recovers from the pandemic.
“The good news is that Colorado’s economy is in recovery mode,” Griswold said.
Colorado’s unemployment rate continues to fall, sitting at 3.7% for the first quarter of 2022, down 0.5 percentage points from the fourth quarter of 2021. The labor-force participation rate sits at 69%.
While employment rates are up, many Coloradans are feeling the pinch of inflation. The report found that residents in the Denver-Aurora-Lakewood area experienced inflation rates of 7.9%, higher than the national average of 6.9%. Lewandowski pointed out that anticipation of continued high inflation could lead to consumers unintentionally exacerbating supply-chain issues.
“As prices remain high, and as consumers expect prices to remain high, they change their consumption habits,” Lewandowski said.
As consumers grapple with inflation and high costs of living, they may turn to entrepreneurship to supplement their income. Griswold promoted two pieces of legislation that could make that process easier.
One is the recently passed Business Filing Address and Name Fraud Act, which would make it easier for small-business owners to seek recourse if a bad actor fraudulently files under their name.
“A small business may have to pay hundreds of thousands of dollars in litigation in order to recoup their identity,” Griswold said.
The bill is on its way to the governor’s desk and if signed would grant the Secretary of State’s office the ability to seek civil action against fraudsters.
Another bill, the Reduce Fees for Business Filings Act, could lower fees to incorporate businesses to as low as $1. That bill is still under consideration in the Colorado state house.
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