Moderate Economic Growth Predicted For Second Half of 2014
Based on the number of new business filings in Colorado for the second quarter of 2014, employment numbers are expected to moderately grow through the remainder of the year. The positive forecast isn’t just based on new companies starting up here, but on year-over-year improvements in existing business renewals, trademarks and trade names that indicate more jobs are on the way.
The results of the report, released by the Colorado Secretary of State’s Office [.pdf], were compiled by CU’s Leeds School of Business. In the past 12 months, 92,569 new business entities were added to Colorado’s economy marking a 4.8 percent increase from the previous year. For the second quarter of 2014 - which ended in June - that number reached 24,601.
That marks a decrease from the previous quarter when new business entity filings rose to 26,523, but a jump from the same time period in 2013.
So with the mixed numbers, why is the 2014 forecast optimistic?
Brian Lewandowski, a research analyst at the University of Colorado’s Leeds School of Business in Boulder, points to the fact that new hires often occur a few months following the formal creation of a business.
“When new business filings go up we expect employment to go up in four to six months. As new businesses are formed, at some point down the road they start to add employees,” said Lewandowski. “That’s where the relationship is between new business filings and employment.”
Lewandowski added that a new business often buys new goods and services in its startup process. That also has a positive yet delayed impact on the economy.
Colorado's employment growth has been ahead of the United States average since 1998 [.pdf], although national employment has been on the rise as well, with a 1.8 percent increase for June, 2014. National unemployment levels also dropped in June to 6.1 percent. That's the lowest it's been since September, 2008.