Weekly Update on COVID-19’s Impact on Business Formation and EntrepreneurshipMay 21, 2020
In April 2020, EIG began tracking COVID-19’s impact on prospective entrepreneurial activity in the United States in a blog post analyzing new weekly data on business formation provided by the U.S. Census Bureau. EIG will continue to provide updates of this dataset to keep a pulse on the latest trends in business formation. The statistics below focus on high-propensity business applications, a specific subset of business applications identified by the Census Bureau as having a high likelihood of turning into true employer businesses.
Nationally, high-propensity business applications in week 20 of 2020 (the week ending May 16th) were down by 2,660 or 10 percent relative to the same week in 2019. The number of high-propensity business applications has risen closer to previous trend levels relative to the steep drop-offs registered in the earlier weeks of the pandemic.
COVID-19’s impact in the economic data became apparent in week 10 of 2020 (the week ending March 7th). Cumulatively, there have only been 252,330 high-propensity business applications between weeks 10 and 20 in 2020, compared to 312,710 during the same weeks of 2019. This amounts to 60,380, or 19 percent, fewer high-propensity applications over the time period relative to one year ago.
In total, there have been 505,940 high-propensity business applications recorded so far in 2020. That figure is 10 percent lower than the 562,590 applications registered in 2019 over the same time period.
The chart below displays the number of high-propensity business applications each week in 2009, for comparison to trends during the Great Recession, as well as in 2019 and 2020.