More than 1.5 million new businesses formed nationwide during the third quarter of 2020, according to the U.S. Census Bureau, an increase of more than 77 percent from the second calendar quarter and the biggest jump in more than 15 years. The data come from the Census Bureau’s Business Formation Statistics research, developed in collaboration with the Board of Governors of the Federal Reserve System and the Internal Revenue Service. The data set tracks applications for new employee identification numbers and is seasonally adjusted.
Timothy Sullivan, Ph.D., instructor in the Department of Economics and Finance at SIUE and director of the Office of Regional Economic Analysis, says the number of new business start-ups from July through September dwarfs any previously documented business formation numbers. “It blows the roof off of the previous record,” Sullivan said. “Over the same time period, Illinois saw a 113 percent increase in the number of new business formations, or approximately 72,000 businesses.”
Wayne Barber, Jr., founding co-principal at Southern Illinois commercial real estate firm BARBERMURPHY, has worked in the real estate business since 1988. He has brokered deals through four U.S. economic recessions – those in 1990-91, 2001, 2007-09 and 2020. Barber says the new business formation statistics in Q3 2020 include what are known as “high-propensity businesses,” meaning those that incorporate, lease space and have payroll.
“We’re seeing it in the prospects who are asking to see potential leasing opportunities,” said Barber. “These (Census) numbers are an encouraging sign that entrepreneurs and existing businesses – here in Southern Illinois and elsewhere – are launching and growing despite one of the toughest times in history. It’s a good sign for where the economy may be headed in terms of a recovery.”
Article by Kerry Smith, Informationworks