Incorporations for 3rd Quarter Soar
New-business incorporations in California in the third quarter reached the highest level this decade for the three-month period, according to a report released Wednesday.
The figures also show that the state’s economic rebound is spreading from major metropolitan areas to outlying regions.
A total of 12,471 new businesses were incorporated statewide last quarter, up 6.4% from a year earlier, said research firm CDB Infotek in Santa Ana, which tracks corporations registered with the secretary of state.
The pace of new-business formation has accelerated since incorporations hit a low point in 1991. So far this year, a total of 40,826 new corporations registered through September, the most for the first nine months of any year since 1989.
Third-quarter incorporations actually were down 7.1% from those in the second quarter. But John Karevoll, a CDB analyst, said the quarterly decrease reflects a typical seasonal pattern.
Incorporations are viewed as a leading indicator of economic activity, presaging productivity gains.
“It’s an indication that businesses are growing,” said Ted Gibson, chief economist at the state Department of Finance.
“People see that sales are doing well and there is a place for new businesses in the marketplace,” he said.
Karevoll said the figures demonstrate that the strong growth in new-business formation seen in Orange County and Silicon Valley the last few years is now reaching regions such as the Inland Empire. “The increase we’ve seen in high-tech centers has migrated out to other areas,” he said.
Incorporations in all of Southern California, including San Diego, grew 6.1% to 8,317 in the third quarter, CDB said.
In Los Angeles County, 5,054 firms incorporated in the third quarter, up 2% from a year earlier. Orange County had 1,415 new incorporations, 3.3% more than in the third quarter of 1996.
The Riverside-San Bernardino region, where incorporations had been declining, saw filings jump 17.7% to 612 in the quarter.
