Tennessee Secretary of State: Increase in new entity filings shows strong economic growth
A trend that officials say is auspicious for the state’s economy, Tennessee is continuing to experience growth in the number of new entity filings, according to numbers released by the Tennessee secretary of state’s office last week.
“Tennessee welcomes new business and business leaders continue to take note,” Tennessee Secretary of State Tre Hargett said in a Feb. 25 press release. “Our data shows strong growth across the state and a healthy economy with no signs of slowing down.”
Statewide, Tennessee saw 10,604 new entity filings in the fourth quarter of 2019, according to a Tennessee Quarterly Business and Economic Report, which is a 7.8% increase over the same quarter in 2018. Hargett said the state has now experienced positive year-over-year growth (comparing a statistic at one point in time with the same point in time last year) in these figures for 33 consecutive quarters.
New filings for domestic nonprofit corporations saw the biggest year-over-year gains with a 13.3% increase, domestics limited liability companies saw a 9.3% increase and foreign entity filings rose 8.8%. Domestic for-profit companies, however, shrunk by 3.8%.
Over the past 12 months, the state has reported a total 46,231 new entity filings.
Because business filings data is “highly seasonal,” the report says the number of fourth-quarter new entity filings and renewals are consistently lower than the third quarter, which is why the report largely focuses on year-over-year growth rates.
“The strong new entity filing numbers in the last quarter of 2019 suggest that Tennessee’s economic expansion and historically low unemployment rate will continue into 2020,” said William Fox, director of the University of Tennessee Knoxville’s Boyd Center for Business and Economic Research, on Feb. 25.
Tallying 2,231, Davidson County experienced the largest number of initial filings, and Shelby County saw second largest with 1,989.
Over that same time span, Washington County had 124 new filings, Sullivan County saw 113 new filings, Carter County saw 27 and Unicoi County saw seven. Most of the new local filings this quarter were for limited liability companies.
Good conditions for small businesses
Mitch Miller, CEO of the Northeast Tennessee Regional Economic Partnership, said current healthy economic conditions mean entrepreneurs are more inclined to take a risk on opening businesses.
“The economy is great right now,” Miller said. “Just sustaining it, that’s the bigger question. I wonder how we can sustain it with limited growth in the region. We’ve got to really work on that, in terms of population.”
With interests rate being low, Miller said it’s a solid market for entrepreneurs to borrow money from banks. Miller said the filings listed in the report are a good indicator of local business performance.
“It would be really concerning if people weren’t taking a risk here,” he said.