Now and Then: How the 2020 Drop in Business Registrations Compares to the Great Recession

As unemployment numbers continue to stun Connecticut with their scale, business registration numbers are also declining.

Business starts, which refer to the number of applications received by the Secretary of State’s Office for new business formations, are another way to look at the impact on our economy.

During the Great Recession, which began in 2007 and continued until 2009 according to the National Bureau of Economic Research, the greatest week-over-week business start decline was 35%, and it occurred the week of November 23, 2008, the 47th week of the year.

As 2020 stakes its claim as one of the most unpredictable years in recent history, we have seen this week-to-week drop grow over the past four weeks, beginning with the third week of March.

Over the past week in Connecticut,  we have seen a 58% decline of week-to-week business starts between 2019 and 2020. Some of this decline is due to the delay in processing of paper applications with staff in the  Secretary of State’s office working from home. However, it is estimated that 85% of applications are submitted online. We will update this blog post with new numbers once they become available.

Last week the Census Bureau released the updated weekly Business Formation Statistics with business application data at the national and regional levels through the week ending April 4, 2020. 

Their data shows that the Northeast region has seen the biggest decline so far, with business starts shrinking by 48.9%, compared to a 33.7% decline nationally.

In times of uncertainty, we need trusted data to understand COVID-19’s complex economic implications, and business starts are just one piece of the puzzle. For more information about business starts, explore our Connecticut Business Data portal. Be sure to sign up for our CTData newsletters to receive data news and updates, or follow us on Facebook, Twitter, or LinkedIn.