New business creation in Louisiana has bucked the national trend for the past three weeks since late April as the state had double digit-growth while much of the country saw new business growth contract slightly.
The new business formation data released by the U.S. Census Bureau includes limited liability companies created to buy real estate and independent consultants.
New business applications in Louisiana increased by 29.4% during the week that ended May 8, compared to a 2.3% decline nationwide.
New applications in Arkansas, Alabama, Mississippi and Georgia increased by more than 16% each during the same time frame.
For the week ending May 1, new applications in Louisiana were up by 28.6% to 1,350 while the national average dropped by 9.8% during the same time period. For the week ending April 24, new applications in the state were up by 15.4% while nationwide that same metric was down 10.5%, data shows.
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More than 1,400 business applications were filed compared to 1,090 last year during the same time frame in Louisiana.
“I am a little surprised to see this, the only thing that I could think of is that we’re starting at a low base, we had just finished our second year of a recession that was quite unique to us,” said Loren Scott, a longtime Louisiana economist.
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Louisiana had between 700 and 800 new business applications between 2008 and 2015 during the same time frame. It topped 1,000 applications in 2017. The last time oil prices plummeted was in 2016, which was a big factor for slow new business growth, Scott said.
“We were starting from a place when there had been major destruction of small businesses,” he said.
Total new business applications since Jan. 1 in Louisiana are still down year over year, 21,440 compared to 23,340 new applications.
Still, the three most recent weeks of data could be an early economic indicator of recovery.
"It does seem like we are running ahead for the last few weeks by a few hundred, which could be a positive sign of people trying to get back to work," said Stephen Barnes, director of the Kathleen Blanco Public Policy Center and associate professor at the University of Louisiana at Lafayette. "I expect most of these filings would be small businesses (or even sole proprietorships or partnerships) including potentially many laid off folks trying something new."