Historic Surge in New Business Filings Signals Renewed Confidence in Economy

May 28, 2021 at 09:57 am by WGNS


New business filings in the first quarter of 2021 grew an astonishing 55.1 percent from 2020 first quarter filings – the largest year-over-year gain in the 28-year history of this data being collected.

The Tennessee Quarterly Business and Economic Indicators report issued by Secretary of State Tre Hargett’s office shows that 19,652 entities filed in the first quarter of 2021, the highest quarterly total on record.

"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,” said Secretary Hargett.

The first quarter of 2021 is the third straight quarter where new business filings grew by over 30 percent from the prior year. Typically, a strong annual gain for any given quarter would be about 15 percent. The record-breaking boom over the last three quarters has roughly doubled or tripled top quarters from the past.

Typically, growth in business filings leads to growth in jobs, personal income and state revenue. Tennessee has seen positive year-over-year growth in initial filings for 37 consecutive quarters. National data indicates that online businesses grew substantially during the pandemic, likely explaining Tennessee's sustained business growth through 2020.

Shelby County saw the largest number of new filings, followed by Davidson, Knox and Hamilton counties. These four most populous counties accounted for 47.9 percent of new filings state-wide.

Tennessee’s unemployment rate, currently at 5 percent, continued to edge down from its 15.8 percent high one year ago but remains above pre-pandemic levels. Tennessee unemployment remains below the national rate of 6.1 percent. The state’s labor force participation rate improved to 60.7 percent.

“COVID-19 has complicated how we compare economic activity over the past year, but initial filings for new businesses during the first quarter of 2021 were the highest in history,” said Dr. Bill Fox, the director of the Boyd Center for Business and Economic Research. “This strong rate of growth signals that Tennessee is experiencing a rapid economic rebound from the pandemic.”

This report provides a snapshot of the state’s economy based on key indicators, including new business data from the Secretary of State’s Division of Business Services. It’s published through a partnership with the University of Tennessee Knoxville’s Boyd Center for Business and Economic Research and the Secretary of State.

To review the complete Q1 2021 Tennessee Quarterly Business and Economic Indicators report, past reports and a teleconference recording about the report with Secretary Hargett and Dr. Fox visit, sos.tn.gov.
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