Colorado sets record for new businesses, per capita income hits $75K
(The Center Square) – Despite inflation, a tight labor market and fears of a recession, a record number of new businesses started operating in the fourth quarter of 2022 in Colorado and many other benchmarks are positive, according to a report by the University of Colorado and the secretary of state's office.
The 48,806 new businesses filing with the secretary of state’s office was the largest single-quarter amount in the history of the report. It marked an 11.8 percent increase compared to the third quarter and a 37.2 percent increase compared to the fourth quarter of 2021, according to the Quarterly Business and Economic Indicators report published by the Leeds Business Research Division at the University of Colorado.
"Our national view is a very slow economy, not necessarily dipping into a recession, but very slow growth," Rich Wobbekind, senior economist and faculty director at the Leeds Business Research Division, said in an interview with The Center Square. "We continue to believe Colorado will grow twice as fast as the nation, at least in terms of state-level [gross domestic product] and probably employment as well. Colorado is outperforming as we tend to be in the top 10 or 15 in almost every metric at this point in time."
The new business data outshined the number of businesses dissolving or delinquent. The report stated 13,293 businesses dissolved during the fourth quarter of 2022, an increase of 14.5 percent from the previous quarter and up 17 percent compared to the same period last year.
Businesses renewing with the state increased 4.5 percent compared to the third quarter and 2.9 percent compared to last year.
Colorado’s per capita personal income of $75,557 grew 7.9 percent during the last quarter of 2022, ranking the state seventh in the nation. Colorado’s GDP increase of 3.2 percent during the third quarter of last year was sixth-highest nationally.
“Colorado has continued our upward economic trajectory,” Democrat Secretary of State Jena Griswold said in a statement. “With another strong year of employment gains and continued job growth, new business entity filings growing at a record pace and inflation diminishing faster than the national average, Colorado continues to lead when it comes to owning and operating a business.”
Inflation rose 6.9 percent in the Denver-Aurora-Lakewood region compared to November of 2021, according to the report. The national inflation rate increased 7.1 percent for the same period. However, core inflation – all items less food and energy – increased 6.7 percent in the Denver area compared to the national rate of 6 percent.
There was an increase of 3.3 percent (100,000) in the number of Coloradans working in the state compared to December 2021 based on a household survey including the self-employed, according to the report. Colorado’s unemployment rate declined to 3.3 percent in December.
Colorado has the second-highest labor force participation rate in the country, according to the report. Despite the tight labor market, Colorado outperformed most states in 2022 in employment, wage growth and GDP.