Colorado loses businesses at one of nation’s highest rates, new report finds

By Jen Schumann | Rocky Mountain Voice

Colorado residents have spent years watching prices climb while business groups warn that operating in the state is becoming harder.

A new report adds another layer of data to those concerns.

Colorado ranked near the bottom nationally for net business establishment growth in 2024 and recorded the nation’s worst employment losses tied to business openings and closures, according to a new analysis from the Common Sense Institute.

While most states added businesses and jobs last year, Colorado was one of only six states to lose ground in both categories, joining Massachusetts, New York, North Carolina, Oregon and Washington. Researchers pointed to high business costs and weakening confidence in Colorado’s economic outlook as growing warning signs.

Erik Gamm’s analysis with the Common Sense Institute pulls from federal Business Employment Dynamics data as well as recent relocation tracking compiled by the Colorado Chamber of Commerce.

Colorado finished 2024 with what the report described as a net loss of 3,934 business establishments, as closures “outpaced openings” 32,055 to 28,121 statewide.

Only Massachusetts and Washington posted steeper losses relative to population, placing Colorado among a small group of just 10 states that ended the year with more business deaths than births.

Colorado was one of the worst-performing states in the country for net business growth in 2024. Source: Common Sense Institute, Colorado lost workplaces at one of the country’s highest rates in 2024 (May 2026).

But the employment numbers may be the report’s most concerning finding.

Colorado’s net loss of establishments translated into a net employment decline of 13,287 jobs. Relative to population, the state lost 2.25 jobs per 1,000 people tied to establishment turnover, the worst rate in the country.

Even fewer states lost jobs tied to business openings and closures. According to the report, only eight states recorded net employment declines connected to establishment turnover in 2024.

A second map in the report paints an even darker picture for Colorado.

Colorado experienced the nation’s largest employment loss tied to business establishment changes relative to population in 2024. Source: CSI analysis of federal Business Employment Dynamics data.

Across the country, new business growth translated into more jobs. Colorado saw the reverse.

The findings arrive as business groups continue warning that rising costs, housing pressures and regulations are making it harder to operate in Colorado than in neighboring states.

The Common Sense Institute didn’t pin the losses on any one law, industry or policy — but its researchers said the numbers point to something bigger: rising operating costs and a shaky outlook for Colorado’s economic future.

Yearly business data can be volatile, the report noted. But Colorado still ended up far outside the national pattern in 2024.

The report lands as lawmakers continue wrestling with a roughly $1.5 billion budget shortfall and wait to see whether Gov. Jared Polis signs the state’s $46.8 billion spending plan.

For businesses already questioning Colorado’s costs, the report is unlikely to ease concerns about where the state is headed.