The latest economic report contains mixed indicators for Colorado

Richard Wobbekind
Jena Griswold

A surge in new business filings bodes well for continued job growth and improving economic conditions in Colorado, according to the latest quarterly report results.

But even as new stores open, existing stores close. Inflation concerns and other challenges continue to dampen expectations.

“Our latest data shows that Colorado’s economy continues to excel compared to the nation. However, business leaders remain pessimistic about the near-term economic outlook,” said Rich Wobbekind, senior economist and faculty director of the department of business research at the Leeds School of Business at the University of Colorado at Boulder.

The department is preparing the report based in part on business records at the Colorado Secretary of State’s Office.

The report on the third quarter offers plenty of reason to celebrate, said Foreign Minister Jena Griswold. “With the state’s GDP, employment, income and workforce all above the national average, we must ensure Colorado’s working families and business community thrive.”

According to the latest report, 43,657 new companies, non-profit corporations and other legal entities were filed in the third quarter. This is an increase of 10.6 percent compared to the second quarter and 14.5 percent compared to the third quarter of 2021.

The rise defied what is usually a seasonal drop between the second and third quarters.

During the year ended in the third quarter, a total of 162,414 new enrollments were registered, up 3.8 percent from the same period last year.

The filing of new businesses is a leading indicator of future business and job growth.

For the third quarter, 163,807 renewals from existing companies were submitted. That is 4.8 percent less than in the second quarter, but 1 percent more than in the third quarter of 2022.

For the year ended the third quarter, 694,194 renewals from existing companies were submitted. That’s an 8.6 percent increase from the same range a year ago.

In the third quarter of 2022, a total of 884,284 companies, corporations and other entities were in good standing, up 5.2 percent year-on-year.

Releases and delinquencies also increased year-over-year, an indicator of business strains.

There were 11,614 dissolution requests in the third quarter, up 27.1 percent from a year ago. During the year ended the third quarter, there were 47,564 resolution requests, up 21.7 percent year-on-year.

There were 790,719 arrears, up 10.1 percent from a year earlier.

Other economic indicators monitored in the report were also mixed.

Gross domestic product, the broad measure of goods and services produced in the state, fell at an annual rate of 2 percent in the second quarter, the latest quarter for which information is available. Nonetheless, GDP rose 3 percent year-on-year.

Colorado ranks eighth among the 50 states with per capita income of $73,357 and first with per capita income growth of 6 percent.

According to Baker Hughes Rig Count, the number of active rigs in Colorado doubled to 22 between October 2021 and October 2022.

However, challenges remain, including inflation.

The consumer price index for the Denver-Aurora-Lakewood region rose 7.7 percent in September compared to the same month last year. Retail gasoline prices rose 1.8 percent year-on-year in October but are down 24.7 percent from a June peak.

The latest results from a quarterly survey of Colorado businesses reflect more pessimism in the fourth quarter.

The Leeds Business Confidence Index fell 1.3 points to 39.8 in the fourth quarter. That’s the fourth-lowest reading in the index’s 20-year history. Readings below 50 reflect negative rather than positive reactions.

Along with the overall score, individual scores for each of the six metrics the index tracks stayed below 50 in the fourth quarter. While expectations for the state and national economy rose, expectations for investment, hiring, earnings and sales fell.