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Business registrations are up in W.Va., but closures high too
Has there been an increase in new businesses in West Virginia? The West Virginia Republican Party says so.
On Sept. 4, the West Virginia GOP tweeted "In 2017, the number of new business registrations in West Virginia grew nearly 11 percent (8,318 new businesses registered for the year). This comes off the heels of a 12 percent increase in new business registrations during 2016."
The tweet cited a news article in the Herald-Dispatch of Huntington, W.Va., that includes this information almost verbatim.
The data comes from the Business Statistics Database maintained by the West Virginia Secretary of State’s office, and the office confirmed to PolitiFact the accuracy of the numbers in the tweet.
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Erin Timony, the office’s assistant communications director, said the numbers focus on limited liability companies and corporate business license registrations by county. Since other types of businesses are not included, the data does not encompass all new businesses in the state.
Another point to note: The tweet cites business registrations, but not business closings.
"The number of businesses that are ‘born’ and ‘die’ in a given year (would) provide a more accurate portrayal of business conditions overall," said Brian Lego, a research assistant professor of economic forecasting at West Virginia University.
This data is compiled by the federal Bureau of Labor Statistics, though data for both births and deaths is available only through the first quarter of 2017.
Here’s a chart showing trends on business births and deaths in West Virginia. Quarters that saw more births than deaths are marked in blue, while quarters that saw deaths exceed births are marked in red:
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So, looked at from this perspective, 15 out of 17 of the last quarters have seen more business deaths than births in West Virginia.
This doesn’t mean that the business registration data is wrong; rather, it just says that the tweet paints an incomplete picture.
The West Virginia Republican Party tweeted, "In 2017, the number of new business registrations in West Virginia grew nearly 11 percent (8,318 new businesses registered for the year). This comes off the heels of a 12 percent increase in new business registrations during 2016."
The data cited in the tweet is solid. However, it looks only at certain types of business births. Looking at data for both business births and deaths shows a less rosy picture for business creation in the state.
The statement is accurate but needs additional information, so we rate it Mostly True.
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Our Sources
West Virginia Republican Party, tweet, Sept. 4, 2018
Herald Dispatch, "Business growth continues in WV, according to state data," Jan. 7, 2018
Bureau of Labor Statistics, private sector establishment births and deaths, seasonally adjusted, accessed Sept. 19, 2018
Email interview with Brian Lego, research assistant professor of economic forecasting at West Virginia University, Sept. 13, 2018
Email interview with Erin Timony, assistant communications director for the West Virginia Secretary of State office, Sept. 13, 2018
Business registrations are up in W.Va., but closures high too
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