Economic Indicators from Secretary of State's Office Show New Entity Filings Up Significantly in First Quarter
New business expansion likely a result of increased confidence, new investment
FOR IMMEDIATE RELEASE
Contact: Pam duPré
Quarterly Economic & Business Activity Report - QTR1, 2011
(Carson City, NV; May 11, 2011) – With mixed reports about the strength of the economic recovery in Nevada coming from a variety of sources, the latest statistics sourced to the Nevada Secretary of State’s office show two consecutive quarters of significant growth in new business entity filings, suggesting new investments may be leading to business expansion. (See the full report at the link above.)
As reported in the Quarterly Economic & Business Activity Report prepared by Applied Analysis, a Nevada-based research and analysis firm, new entity filings were up 12% in the first quarter of 2011 compared to the same period in 2010. The latest quarterly growth followed the preceding quarter’s positive performance, which was the first since mid-2006.
“I’m as optimistic as I’ve ever been that Nevada has broken through the restraints of the worst recession in decades and is now moving steadily toward economic recovery,” Secretary of State Ross Miller said after reviewing the analysis. “Nevada has a history of incredible resilience, and I’m confident that history will repeat itself. While I don’t think anyone expects to quickly rebound to record-breaking growth, I believe the latest numbers from my office indicate that more people will find work in the coming months and that we all can look forward to greater economic stability.”
“With the release of our fourth quarter report a few months ago, new business entity filings increased for the first time since the downturn began. The increase was significant as Nevada’s annual job growth turned positive three months later,” added Applied Analysis Principal Jeremy Aguero. “This is not to suggest a perfect correlation, but it is consistent with historical trends where new entity filings have signaled broader changes in Nevada’s economy. More encouraging is the fact that new business filings remained up for the second consecutive quarter, lending increased confidence relative to the stability of the recovery and suggesting improved job prospects for the balance of the year.”
In the previous report from the last quarter of 2010, Applied Analysis identified new business entity filings as a leading indicator of future economic activity. With all new businesses to the state required to register, entity filings with the Secretary of State’s office tend to indicate the level of investment taking place in the community. During historical economic cycles, an improving number of new business entities ultimately led to job creation. The reverse was also true as the economy turned toward recession.
Should historical trends hold true to form, general economic growth – including increased stability within the job market – should follow. When the new entity filings are charted with employment figures, it becomes clear that the new business filing statistics kept by the Secretary of State’s office may be a reliable leading indicator of future economic activity. The conclusion is supported by what Applied Analysis identified as a lagging indicator - the filings that entities must submit on an annual basis once they are initially formed.
The research firm has analyzed hundreds of economic indicators and concluded that new business filings reported by the Secretary of State’s office provide meaningful insight and may even be an early warning system of future economic instability. Mr. Aguero also indicated that since these data have not been reported on a recurring basis, they may have been overlooked in the past. The Quarterly Economic & Business Activity Report generated by Nevada Secretary of State with the support of Applied Analysis is expected to be published on a recurring, quarterly basis.
“This analysis demonstrates that there’s a previously unrealized value to the information my office is generating and storing,” said Miller, whose office is the gateway for any business entity that wants to establish a business or incorporate in Nevada. “It’s clearly a resource worthy of ongoing analysis and evaluation. Whether it’s the private or public sector, economic data that proves to be indicative can provide insight into future trends, helping us to prepare for what lies ahead.”
The Quarterly Economic & Business Activity Report was prepared by Applied Analysis at no cost to the state using data provided by the Office of the Secretary of State.