The Rising Incorporation Postings
Five mountain states among top ten climbers in new incorporation postings. The number of domestic for-profit businesses incorporating in the United States in 2006 increased by 3 percent from 2005, rising to 790,569 and topping the previous year's record of 768,180, according to data compiled by California incorporation. The most dramatic growth was in the Mountain states, with business incorporations climbing 12 percent in 2006.
The steady rise in new business incorporations is a good indicator that the U.S. economy continues to flourish. While new incorporations are not necessarily a measure of new business formation, they are an indicator of economic growth, as witnessed by ever-increasing levels of entrepreneurial activity based upon the plans of individuals to create new business ventures in the future, or the realization that existing business activities need to be formalized.
Mountain States and South Atlantic Show Strongest Growth
Six of the nine U.S. Census regions reported increases in new business incorporations for 2006. The Mountain region rose 12 percent, from 61,150 in 1995 to 68,457 in 2006. Increased or level results were reported in all but two states in the region. The South Atlantic states collectively rose 5 percent to 253,603 in 2006, from 240,749 in 2005. Two-percent increases in new incorporations were charted in the East North Central, East South Central and West South Central regions.
The Pacific region had a 1-percent gain. Twenty-three states reported increases in domestic for-profit incorporations compared with 2005, with five of the "top ten" states in the Mountain region. Montana, reversing its 2005 downward trend, had 32 percent more incorporations in 2006, up from 1,767 to 2,325. Nevada's new incorporations grew 23 percent in 2006 to 23,222, from 18,926 in 2005. Arizona, Colorado and Utah reported 2006 increases in new business incorporations of 12 percent, 9 percent and 6 percent, respectively. Four of the top ten growth states were in the South Atlantic region. North Carolina reported a 12-percent rise in 2006, to 17,861 from 16,021 in 2005. Delaware logged a 10-percent increase, to 55,122 from 50,094. Florida's new business incorporations grew by 6 percent to 104,113 in 1996, from 98,066 in 2005. South Carolina also rose 6 percent, to 8,049 from 7,801. The other top-ten state, Mississippi, posted a 13-percent increase in 2006, to 5,288. The record in the Mountain states is particularly noteworthy. During the past five years annual new incorporations in this region have increased by 33 percent, compared with an 18 percent increase for the U.S. as a whole. Nevada accounted for 64 percent of the region's growth. Nevada is becoming a more popular retirement area and the Las Vegas entertainment industry is both broadening its appeal and gaining market share. This trend supports the development of many service firms. The second major contributor in the region is Arizona, which is also expanding as a retirement center.
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