Secretary of State Tre Hargett and his office issued a report on Thursday, showing a significant increase in new business filings in the state of Tennessee.
Compared to the first quarter of last year, new entity filings grew by 55.1 percent.
The 19,652 first quarter entities are the most filings recorded in the data’s 28-year history.
“This data is an encouraging sign and a strong vote of confidence by Tennesseans and people worldwide investing in our state’s business and entrepreneur-friendly environment,” Hargett said.
This marks the 37th consecutive quarter that Tennessee has seen year-over-year growth in initial filings, showing positive signs for the state’s economic status moving forward.
Shelby County was responsible for a large amount of the new filings, followed by Davidson, Knox and Hamilton County. Together, the four accounted for nearly half of the new recorded filings in the state.
Dr. Bill Fox, director of the Boyd Center for Business and Economic Research, was also on the teleconference with Hargett.
Fox highlighted that Shelby County was impacted more by job losses as measured by claims of unemployment insurance, creating an environment filled with potential workers and opportunities.
“It’s not surprising that Shelby is seeing more entrepreneurial activity, as companies shut down, it created more opportunities for businesses,” Fox said. “Likely a lot of these companies that are starting up are people saying ‘hey, here is my chance in life to start my own business and grow and create my income through this fashion’”
While the 55.1% increase of new first-quarter entities is encouraging, the report does make note that the number is likely inflated due to the COVID-19 pandemic.
“Historically, growth in new entity filings has been a good leading indicator for nonfarm employment, personal income, and total tax revenue growth in Tennessee,” the report noted. “However, the pandemic has led to swift and dramatic shifts in economic activity, which cannot be fully captured by a leading indicator.”
While unemployment, new entity filings, and unemployment rates all showed positive marks, annual report filings recorded slightly less (3%) from the same period last year.