New Business Applications in the Heartland: Early 2020 Weekly Trends During the Covid-19 Pandemic

Summary of Study

Bottom line: While new business applications have picked back up in Missouri and across the nation following a significant slowdown due to the CovId-19 economic shutdowns, applications in Nebraska, Iowa, and Kansas remain depressed. In Missouri, new business applications are actually slightly higher now than before the Covid-19 crisis, suggesting more entrepreneurial opportunity. The national low point during this period was in the week ending March 28, a decline of about one-third from the start of the period.

This study examines the trend in new business applications in the heartland -- Missouri, Nebraska, Iowa, and Kansas -- over 19 weeks, from the weeks ending January 18 to May 23, 2020 to determine the impact that Covid-19 has had on entrepreneurship.  From the first to last week in the 19-week period, new business applications increased by 5.3% in Missouri and declined by 19.6% in Iowa, 8.3% in Kansas, and 9.7% in Nebraska. This compares to an overall national decline of 4.8% over the same period.

Missouri has more new business registrations than the other three states, which is not surprising given the size of the state economy and population. New business applications respond quickly, with substantial week-to-week variation that is not apparent when examining the overall trends. Kansas and Missouri largely trend in the same direction with the national trend.  Since their low points within the 19-week period, new business applications have been increasing weekly in Kansas and Missouri. This trend is in contrast to the rates nationally and in Iowa. There have also been increases and decreases in new business applications in Nebraska since its low point during the 19-week period.

For Iowa, Kansas, and Missouri, the lowest point for new business applications happened at the same time: by the week ending March 28, new business applications had declined by 30.4% in Iowa, 35.4% in Kansas, and 38.2% in Missouri. The low point in Kansas lasted two weeks. The national low point during the period was also in the week ending March 28, which marked a decline of about one-third from the start of the period. In Nebraska, the lowest point came two weeks later. 

The trend in new business applications is a useful marker of how economic activity is unfolding under Covid-19 conditions. Yet given that the pandemic creates multiple health and economic priorities, new business applications should not be treated as a linear marker of economic performance.

Read the full study HERE

Feature Charticle

Heartland Trends in New Business Applications

Kauffman Foundation

Findings:

  • While new business applications have picked back up in Missouri and across the nation following CovId-19 economic shutdowns, applications in Nebraska, Iowa, and Kansas remain depressed. 
  • In Missouri, new business applications are actually slightly higher now than before the Covid-19 crisis, suggesting pent-up demand. 
  • The national low point during the period was in the week ending March 28, a decline of about one-third from the start of the period.

Read the full study HERE