Jan 18, 2024 - Business

Mapped: America's new business hotspots

Change in new business applications
Data: Census Bureau; Map: Alice Feng/Axios

The Midwest and Mountain West are America's latest new-business hotspots, a new Axios analysis finds.

Why it matters: New business applications — which rose 7.4% nationally between December 2022 and December 2023 — are an excellent indicator of economic sentiment. Few people try to start a company when they foresee bad times ahead.

  • Breaking down this data state by state can offer a regionalized barometer of economic sentiment across the country.

Driving the news: Colorado (+115%), North Dakota (+37.7%) and Iowa (+33.7%) had the highest year-over-year change in new business applications between December 2022 and December 2023, according to seasonally adjusted Census Bureau data.

  • Georgia (-9.9%), Louisiana (-8.6%) and Mississippi (-6.4%) had the largest decline in growth.

The intrigue: Many of the emerging new-business hotspots have also seen recent population spikes.

  • That makes sense — more people, more business opportunities.

Of note: Colorado temporarily lowered the cost of filing for a new business from $50 to $1 between mid-2022 and mid-2023 — in line with a broader billion-dollar statewide push to encourage new business creation and draw existing employers to the Centennial State.

Meanwhile: New businesses with women, Black, Latino, Asian and LGBTQ owners all rose year over year in January-July 2023 compared to the same period in 2022, Axios Closer's Hope King reports from separate Yelp data.

Yes, but: New business applications can only capture the financial mood among Americans with the means to start a company.

  • Those less well-off likely have a less rosy view of things.
  • Many younger Americans, for example, are stressed out about their finances, while renters are much more likely to say they're in bad financial shape compared to homeowners, per recent findings from our ongoing Axios Vibes/Harris Poll surveys.

Plus: Just because somebody files paperwork to start a business doesn't mean that enterprise ever gets off the ground and hires people, of course.

  • Still, when looking only at businesses that the Census Bureau identifies as having a high chance of employing people, new business applications were up 10.3% nationally between December 2022 and December 2023.

The bottom line: Looking for signs of American optimism? Go West.

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