Hamilton County leads growth in new businesses

Hamilton County leads growth in new businesses

May 22nd, 2015 by Dave Flessner in Business Around the Region

Hamilton County led the state during the first quarter of 2015 in the growth rate of firms filing to do business in Tennessee.

Bill Fox

Bill Fox

Photo by Associated Press /Times Free Press.

Initial business filings

In the first three months of 2015:

* Hamilton County -- 507 businesses, up 17.9 percent from a year ago

* Shelby County -- 1,195 businesses, up 8.9 percent from a year ago

* Davidson County -- 1,509 businesses, up 3.1 percent

* Knox County -- 579 businesses, up 0.7 percent

Source: University of Tennessee Center for Business and Economic Research

Jobless in April

* 5.4 percent nationwide, down from 5.5 percent in March

* 6 percent in Tennessee, down from 6.3 percent in March

* 6.3 percent in Georgia, unchanged from March

Sources: Tennessee Department of Labor and Workforce Development, Georgia Department of Labor, U.S. Bureau of Labor Statistics

The number of business entities making initial filings with the Tennessee Secretary of State jumped nearly 18 percent in Hamilton County during the first three months of the year, "showing that 2015 will continue to be a very good year," University of Tennessee Economist Bill Fox said.

The increase in business startups came as the state's employment market continues to improve. Last month, the jobless rate in Tennessee fell by three-tenths of a percent to 6 percent -- the lowest level in seven years after Tennessee added 47,000 jobs over the past 12 months.

"The creation of new companies we are seeing is concurrent with a lot of broad economic indicators that are indicating a strong economic growth rate," said Fox, director of the UT Center for Business and Economic Research. "During better economic times like we are seeing now, we see an unusually high number of startups with greater optimism, more access to resources and more expectation of greater consumer demand. The fact that we are seeing record high levels of business filings does speak very good news about where Tennessee's economy is headed."

Statewide, the number of business entity filings grew 9.3 percent to a record high in the first quarter of 2015 as an improving and changing economy encouraged more persons to start new businesses.

In Chattanooga, which has created a number of venture funds, business incubators and small business assistance programs in the past decade, the gains were twice the statewide average.

"The Zeitguist of our community, I feel, is toward entrepreneurship and growing businesses," said Dana Perry, a partner of the Chambliss law firm which has created its own startup group with nearly a dozen attorneys focused on new businesses in Chattanooga. "We've always been a strong community for locally grown business. But I feel like at all levels now, for those who are coming into our community or those who have a new business idea, there is a pathway to guide them and help them succeed."

Last month, the personal finance web site WalletHub listed Chattanooga among the five best cities in America to start a business. The study of the nation's 150 biggest cities determined that Chattanooga had some of the best support resources for starting and nurturing new businesses.

With more startups come more failures and the number of business dissolutions also went up in the first quarter, although not as fast as the new startup filings. But Fox said over time, the new businesses that survive should continue to add jobs and drive down the state's unemployment rate.

Tennessee's Department of Labor and Workforce Development reported Thursday that the state's 6 pecent jobless rate last month was the lowest since 2008. In neighboring Georgia, unemployment remained unchanged during April at 6.3 percent, although jobs continued to be added last month.

Both Tennessee and Georgia maintained unemployment rates well above the U.S. rate of 5.4 percent last month.

But Georgia Labor Commissioner Mark Butler said employment growth in the Peach state over the past year was by 3 percent with the addition of 121,900 jobs.

"While our unemployment rate for April held steady for the third straight month, our employers continue to create new jobs and lay off fewer workers," Butler said. "We did very well over the year, as we saw the largest April-to-April job growth we've seen in 16 years."

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.