The southern states received 737,622 new business applications last quarter, accounting for nearly half of the country total according to new data from the U.S. Census Bureau.
Applications in the South increased by 96.9% year over year, a near double in new business applications since the onset of the coronavirus pandemic in March. While this increase was seen across the U.S., the South led the nation in sheer number of applications, far exceeding the Northeast, Midwest and West.
The Census Bureau defines the South state region as Delaware, Maryland, Virginia, West Virginia, Kentucky, North Carolina, South Carolina, Tennessee, Georgia, Florida, Alabama, Mississippi, Arkansas, Louisiana, Texas, Oklahoma and the District of Columbia.
Applications more than doubled in Alabama in particular — 22,280 new businesses submitted applications in the third quarter of 2020, as compared to 10,007 in the third quarter of 2019.
Alexander City Chamber of Commerce president Ed Collari spoke anecdotally of some of the business growth he’s seen in the Lake Martin region since the pandemic.
“A lot of people have looked at this as an opportunity to chase that entrepreneurial spirit,” Collari said. “I think that’s where we’re starting to see the growth in business license requests. People either lost their job or got furloughed during the pandemic and I think that was a time for a lot of people to look within themselves and look at it as an opportunity to take that leap.”
Indeed, the Lake Martin Innovation Center — the chamber’s business incubator — has received an uptick in interest for office and co-working space, Collari said.
“Economically, the pandemic has been beneficial, as awful as that is to say,” Collari said.
Strategically located on 280 between Auburn-Opelika and Birmingham and a stone’s throw from Montgomery, the Lake Martin region is well-placed for an urban exodus.
“You’re seeing the remote worker base continue to grow,” Collari said. “That’s great for our market because so many people have secondary homes that are now becoming full-time homes and they now want to get out of the big city.”
While this may change with the pandemic — with Lake Martin once again taking a back seat to far-flung tourism destinations — Collari thinks some of that growth is permanent.
“For a while it was always ‘Lake Martin, the hidden gem,’” he said. “Well, the secret’s out and it’s been out for a while, so I think there’s permanency to it.”
To illustrate this, Collari points to the real estate market, where Lake Martin waterfront inventory is at an all-time low — currently fewer than 100 properties, he said.
Meanwhile, pandemic relief funding and the lowered-barriers of the internet have made it easier to start a business these days.
“If you’ve got a little bit of that extra cushion it lessens that risk to go out there and try to open up a business,” Collari said. “It’s just a really unique environment that we’re in right now.”
As for why the South has seen so much growth, this may reflect overall population growth in the region, Collari said. Indeed, of the four aforementioned regions of the U.S., the South has seen the highest population growth rate since 2010, according to Census data.
In a year of pandemic and social unrest, “I think people have kind of flocked to rural areas,” Collari said. “Once you get here you realize you know what, this is actually really nice.”