Announcing New Business Formation Data
U.S. Census Bureau Releasing New, Timely Business Application and Formation Data
New data released by the U.S. Census Bureau will finally address a major pain point felt by anyone who has used business statistics published by the Census: significant lag time and lack of currency of information.
Called Business Formation Statistics (BFS), this dataset will not be collected by surveys but by records collected by the IRS.
Below we include a few highlights and use cases for the data, along with a little sample displayed in a heat map of the U.S.
If you'd like to ask us any questions not addressed in this post, feel free to email us.
Highlights of the Business Formation Statistics
1. TIMELINESS OF DATA: quarterly, then monthly and weekly
The initial release of the data is available quarterly, with subsequent improvements offering monthly and even weekly updates (!). The first period available is Q2 2019, with time series historical data for prior periods.
2. TYPES OF DATA: business applications and formations
Users will be able to track both applications for new businesses, as submitted to the IRS, as well as formation series data, including the period of the business' first payroll. A subset of the application data that economic developers will be especially keen to details "High-propensity Business Applications" – those firms who intend to hire employees, and thus provide a great lense into economic activity and prospects to increase jobs in a region.
3. KEY USES: from policy to economic development to entrepreneurship
It has typically been quite difficult for those engaged in economic development and policymaking to accurately pin down business activity statistics, especially in local economies. As stated above, the lag time in typical sources of business data made the data marginally useful for this purpose, except as a rearview mirror. Similarly, entrepreneurs will find great value in BFS data for their own business planning, which is susceptible to economic conditions.
A LITTLE DATA DEMO!Here's a quick sample of state level BFS data displayed on a heat map of the U.S. Hover over your state for new business formation data.
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