New business filings in Colorado grew in the first quarter of the year, despite several concerning economic trends across the state, according to a new report released Monday.

There were nearly 55,000 new businesses registered in the state during the first three months of the year, up 12.3% year-over-year, the report from the University of Colorado Boulder said. The state also saw business renewals rise 16.2% compared to last year.

New business filings is an economic measurement tracking entrepreneurial activity in the state. A new business — from large companies setting up an office to a new storefront opening or a cleaning worker setting up their own practice — is required by law to register with the Colorado’s Secretary of State’s Office.

As business filing trends are seasonal, the first quarter of the year typically sees more activity.

But this surge of business filings is “extraordinary,” said Brian Lewandowski, CU Boulder economist, during a media call. The first quarter saw the highest level of new filings in the history of the report since it began tracking state data in 2005.

Meanwhile, two key measurements to track businesses that are behind on their state registrations or have decided to close down is a “mixed bag,” Lewandowski said, though it seems to look optimistic.

Delinquencies, which track businesses that are late to renewing their filings, rose by 9.4% compared to last year. Dissolutions, businesses that have closed, fell by 10.5%.

But over the last few quarters, delinquencies haven’t been trending toward more dissolutions — meaning businesses could just be late to filing.

“I think this is really positive, because we see a rise in good-standing entities and a rise in delinquencies,” Lewandowski said. “But it looks like they are getting those delinquencies resolved and they are not dissolving their businesses.”

Entities in good standing rose 3.7% year-over-year, the report said.

“This latest report shows strong growth in new entity filings and renewals, alongside continued growth in entities in good standing and a decline in dissolutions,” said Colorado Secretary of State Jena Griswold in a news release. “The employment market continues to be uncertain, however, and the state must continue to prioritize affordability so working Coloradans aren’t left behind.”

3 worrisome trends

The business filings are a brighter spot for Colorado’s economy, as other trends show either slow growth or losses.

Lewandowski said it’s hard to decipher why there has been an unusual surge in business filings, as new registrations don’t include data for why someone is starting a business, though recently, higher filing activity has been attributed to people starting businesses as a means of earning a second income.

Last year, Griswold, a Democrat opposed to President Donald Trump’s economic policies such as tariffs, said it could be a sign that more people are scared of the future of the economy and are looking for additional sources of money.

“People could be opening up businesses because they are trying to supplement their incomes, whether they are working hourly or salary jobs, and they feel that they need to bring more resources in or because their paycheck just isn’t stretching far enough,” Griswold said.

Colorado’s economy is facing three major risks: a national economy that grew slower than expected, a contracting job market and the spike in energy prices that could reignite high inflation.

The U.S. economy’s gross domestic product grew by 0.5% between the third quarter of 2025 to the fourth quarter, down from 4.4% in the third quarter.

Earlier this month, newly updated federal data showed Colorado’s job market contracted in 2025. The state lost 11,700 jobs at an annual rate of -0.4%. The state was ranked 39th for its growth in January 2026, the CU Boulder report said.

Other than the healthcare sector, most industries in the state recorded year-over-year declines.

“In 2025, we had five negative months of employment growth,” Lewandowski said. “Just to demonstrate how dominated the growth was by one industry, healthcare, if we remove the healthcare growth, then we actually had 10 months of losses in 2025 instead of five months of losses.”

Another new concern is the U.S.-Israel war in Iran, which has led gas prices to rise 64% in Colorado between January and April, according to CU Boulder. Lewandowski said it’s unprecedented for the state to see this rapid rise in gas and oil prices as quickly as it has, and it’s already showing up in recent inflation numbers.

Inflation in the Denver-Aurora-Lakewood metropolitan area rose 4.2% in March, a high not seen since November 2023.

Historically, when prices stay this high for six months or more, it puts the economy at high risk of recession, said Richard Wobbekind, CU Boulder economist. It might take another quarter to see the effects the high gas prices have on the wider economy.

“So that’s, of course, what we’re going to worry about in terms of the macro picture,” Wobbekind said. “We don’t have that concern right now, assuming that this is not going to go on forever.”