New business filings in the state of Colorado dropped 5.6 percent during the first quarter as the COVID-19 pandemic tanked the economy, according to a report by researchers at the University of Colorado Leeds School of Business.
Applications for trademarks dropped 15.7 percent, the report found. Meanwhile, entities in good standing fell 1 percent, marking a rare decline in that measure, according to Richard Wobbekind, executive director at the Leeds Business Research Division.
The state’s business filings are viewed as good indicators of future job creation, Wobbekind said. The stark numbers show that Colorado’s economy will likely feel the impacts of COVID-19 for many months, he said.
Business confidence had already taken a hit.
Colorado’s economy was on solid footing heading into 2020, though cracks were emerging. The quarterly decline in new business filings started showing up in weekly data in February, before the statewide shutdown of non-essential businesses. The early drop can be attributed largely to the plunge in oil prices, Wobbekind said.
“I think you have to just say the economy was weakening before and the coronavirus just put the kibosh on it,” Wobbekind said in a conference call with reporters.
The fallout has brought a decade of job growth in Colorado to an end. The unemployment rate jumped to 4.5 percent in March, exceeding the national average, Secretary of State Jena Griswold said during the conference call. The state’s reliance on service jobs, as well as the tourism and energy sectors, are pushing jobless claims higher, she said.
Economic data has not fully caught up with the rapid pace of the pandemic’s freeze on life and business. The most recent figures on Colorado’s gross domestic product reflect 3.4 percent year-over-year growth, but economists project double-digit declines going forward, according to the report.
Tourism will be the last segment of the economy to recover, hurting mountain communities. Metro areas like Denver and Boulder will bounce back faster, the researchers found. Coloradans are encouraged to vacation within the state — once it’s’ safe to do so — to boost local entrepreneurs, Wobbekind said.
“Can we get more Coloradoans to do more Colorado vacations… If we’re not going to get on a plane, there are plenty of beautiful places to see.”