Transportation Archives - Colorado-based Business and Economic Research

DIA Passenger Growth – Another Sign of Improving Economy

April 15, 2012April 15, 2012 horvath Leave a comment

Denver International Airport had 52.8 million people pass through its gates in 2011. This represents a 1.7% increase over the 2010 total of 52.0 million passengers. It is also the fourth consecutive year for DIA to see more than 50 million travelers. These totals place DIA as the fifth busiest airport in the U.S. behind Atlanta, O’Hare,Los Angeles, and Dallas-Fort Worth.

While some carriers have decreased capacity, state and local officials continue to bring additional carriers to the area. Icelandair and Spirit will add flights to Denver in 2012.

This good news is another sign that the national and state economies are showing improvement.

Relief in the Decline of Gas Prices?

November 30, 2011November 30, 2011 horvath Leave a comment

Baseball Hall of Famer Yogi Berra said “It’s déjà vu all over again”. This famous quote originated as a result of Berra watching Mickey Mantle and Roger Maris hit back-to-back home runs on multiple occasions for the New York Yankees in the early 1960s.

Today Berra’s quote applies to the price of a gallon of gasoline.

According to the EIA, the price at the pump has recently dropped; however, the average price for a gallon for all formulations on November 28 was $3.38, compared to $2.69 two years prior. The November price is down from a Colorado high of $3.83 in mid-May. Nationally, the price topped $4.00 a gallon for three weeks in May.

While these prices are admittedly high, Coloradans are fortunate. Over the past ten years, the price of gasoline is lower in Colorado than the U.S. average about 70% of the time.

For the period 12/1/2010 to 11/30/2011, the cost for Coloradans to purchase 15 gallons of gasoline a week would have been about $2,661. For the 52 weeks prior, costs would have been $2,101; and they would have been$1,737 for the year prior to that.

For some Americans the extra cost is an annoyance. For the unemployed, those who have gone months without a meaningful pay increase, or those who are living on fixed or limited incomes, the additional $40+ per month (for gasoline) is significant. In addition higher fuel costs are indirectly causing increases in food prices, building materials, and various consumer goods and services.

While the recent decline is welcome. “It’s déjà vu all over again”. The reprieve is only temporary.

U.S. 36 Project Paves Way for Economic Development

October 25, 2011October 25, 2011 horvath Leave a comment

The U.S. 36 corridor between Denver and Boulder is on the cusp of significant transportation investments. The $310 million Managed Lanes/Bus Rapid Transit Project begins in the spring of 2012 and will be the largest Colorado Department of Transportation project in the state for the next few years. It is expected to generate 2,400 direct jobs.

The first phase of funding will add multimodal elements to 10 miles of U.S. 36 from Pecos Street to Interlocken Loop, including:
• HOV/HOT lane in each direction;
• Bus rapid-transit service;
• Corridor-wide bikeway: and
• Replacement of Lowell Boulevard, 112th Avenue, and Wadsworth bridges.

The Colorado High Performance Transportation Enterprise is concurrently defining developer interest to complete the second phase of the project to Table Mesa in Boulder. Potentially, the entire corridor project could be completed by July 2015.

Over the next 24 years, employment is expected to increase by 53% and population will grow by 28%. As anyone who has traveled 36 can testify, improvement of the corridor is essential for better access to commerce in the northwest metro region.

The above information has been provided by 36 Commuting Solutions in a recent press release.

10 Years After 9/11 – Tourism Initially Hit Hard

August 2, 2011May 20, 2014 horvath Leave a comment

Over the next six weeks this blog will look back 10 years at the change in the national and state economies. In particular, it will take a simplistic look at the possible impact that 9/11 may have had on Colorado’s Lost Decade.

There are analyses that suggest Osama bin Laden inflicted extended damage on the U.S. economy. These calculations show the direct and indirect costs of fighting two wars, tracking OBL and other al Qaeda for the past 10 years, and adopting increased security measures.

Others believe the long-term financial impact of 9/11 was minimal. These viewpoints suggest the 2001 recession was a normal part of the business cycle and the self-inflicted wounds from the financial and housing crises were far greater than the impact of 9/11.

The brief comments provided in this and subsequent blogs are not intended to prove or disprove these viewpoints. Rather, the intent is to show how different sectors of the Colorado economy reacted to 9/11, the financial crises, the housing bubble, and the 2001 and 2007 recessions. In September this blogs will be summarized and compiled at CBER.co

We’ll begin the discussion by looking at the Leisure and Hospitality sectors.

Tourism was the industry that was initially hit the hardest by 9/11, more so in states such as Nevada than Colorado. Nevertheless, the impact in Colorado was felt immediately. In 2002 there was a drop off in DIA passengers, skier visits, and park visits. This was accompanied by an obvious decline in tourism-related employment.

Sector employment remained soft through 2004. Between 2005 and 2009 the number of leisure and hospitality workers has grown at a rate similar to total state employment. Although tourism employment was hit hard in the 2007 recession, it has since recovered at a faster rate than most other sectors.

On the other hand, employment in Colorado’s air transportation industry declined over the past decade. The sharpest part of the decline coincided with 9/11. A series of industry issues (consolidation, competition, increased productivity, pricing wars, etc.) were exacerbated by the unexpected decline in business. Despite a decline in air transportation employment, the number of passengers at DIA increased from about 39 million in 2000 to more than 51 million in 2010.

Colorado’s Bottom-Up Economic Development Strategy

February 11, 2011May 31, 2014 horvath Leave a comment

The first week in February Governor Hickenlooper (call me “John”) hosted the ninth stop in his Bottom-Up Economic Development tour across Colorado. For about two hours, the region’s top economic developers discussed job creation, economic development, and steps for increasing government efficiencies.

The most frequently discussed topic was transportation and the top priority was to complete FasTracks in a timely and cost effective manner. In addition leaders made a case for completion of the final leg of the beltway (between Broomfield and Golden) around the city, expansion of commercial air, maintenance of our bridges and highways, and reduction of congestion along I-70 into ski country.

Panelists felt that innovation and the attraction/retention of primary jobs was critical if we are to maintain our regional and national competitiveness. They also cited the need to have a well-trained workforce and an efficient, accountable, and adequately funded education system. As well, it is imperative that Coloradans work together to maintain the quality of life that makes the state so attractive. This will require leaders to address issues related to our water supplies, develop parks and recreation areas, invest in infrastructure, and utilize the state’s unique assets to attract commerce.

The metro area’s economic diversity was evident as leaders spoke in support of industries and clusters endemic to their region. For example, they addressed the need for the state to be more “military-friendly”, consider construction of nuclear power plants, understand the importance of refineries, realize the value of our construction and extractive industries, and support gaming and tourism.

As the Bottom-Up discussions continue, it would be beneficial to reflect on past economic-development successes. For example, consider the public-private partnership, the former Colorado Advanced Technology Institute (CATI). During the late 1980s, CATI was established to guide the development of science and technology and the growth of select high-tech clusters. Specifically, the group’s work laid the groundwork for the state’s photonics, materials, hardware, software, telecommunications, and bioscience clusters. While it may not be appropriate to resurrect CATI as it existed, there is merit in having the an organization that would fill many of CATI’s roles in fostering long-term growth.

Four years ago, a state job cabinet was formed, town meetings were held across the state to gather input, and plans were put in place. While that effort was well intended, it did not have the desired impact. Hopefully this Bottom-Up Planning approach with be more successful.

A well-thought out economic development plan couldn’t come at a better time. Colorado employment remains below the 2001 peak and it will be years before state payrolls return to the pre-Great Recession high mark.

Transportation Industry Hit Hard

October 22, 2010May 31, 2014 horvath Leave a comment

Previous blog discussions have focused on the relationship between the economy and two important components of Colorado’s transportation infrastructure, DIA and RTD . The state’s transportation system also includes bridges, roadways, smaller airports, and mass transit systems – all falling under the oversight of the Colorado Department of Transportation (CDOT) .

In addition to infrastructure, Colorado has a very vibrant transportation industry, i.e. the companies that transport people and goods. Approximately 58,000 people, or 2.8% of the state’s workforce, are employed at 3,800 companies. They receive $2.6 billion in total wages, or 2.5% of the state’s total. Average annual wages are in the neighborhood of $41,000, slightly less than the overall state average. Some of the major types of companies include:

• 2,100 Truck transport companies
• 670 Transportation support companies
• 340 Couriers
• 250 Warehouse companies
• 200 Ground transport companies
• 140 Air transportation companies

About 60% of the transportation workforce is located in Adams and Denver counties, in close proximity to DIA, Front Range Airport, and the state’s major arteries (I-25, I-70, Colorado I-76, and Colorado US 85).

Over the past two years about 10,000 jobs have been trimmed from the transportation workforce, a disproportionately high percentage of workers. Time will tell whether or not all of these positions will be recovered and the impact these job losses have on Colorado’s competitiveness.