Blog - Colorado-based Business and Economic Research

State’s Flagship University one of Nation’s Top Underperformers

December 24, 2013December 24, 2013 horvath Leave a comment

Higher education is critical to the future of the U.S as a world leader. Our universities educate the future leaders, athletes, scientists, and bartenders. As well research in conducted that helps the country maintain its competitive advantage in innovation and global output.

On December 12, U.S. News and World Report released a report listing the country’s top higher education overperformers and underperformers. The over/under ratings compare the schools overall ranking and the peer assessment ranking. If the peer assessment ranking is higher than the overall ranking, then the school is an overperformer. If the peer assessment is lower, then the institution is an underperfomer. The authors stated that overperformers do better on a relative basis in the following key academic statistical indicators: admissions selectivity, financial and faculty resources, graduation and retention rates, alumni giving and graduation rate performance.

Most of the overperformers are small research universities which tend to be located in the Midwest or East Coast. On the other hand many of the underperformers are large public universities located in the Midwest or West Coast.

At the time the University of Colorado joined the PAC-12 Athletic Conference, CU President Benson got in hot water for discussing the academic strength of the PAC-12 and the academic weakness of certain schools in the Big 12. Ironically, there are only two schools from the former Big 12 Conference on the list of underperformers and they are five PAC-12 schools, including CU Boulder, on the list of underperformers. Hopefully, the mention of the two CU campuses on the underperformer list will be addressed.

There are a variety of reasons schools may be underperformers, some of those reasons relate to deficiencies in the universities, while others relate to idiosyncrasies in the ranking process. There are flaws in reports such as those produced by U.S. News just as there are flaws in the system used to determine the national collegiate football champion. Having said that, the rankings provide universities with a set of metrics for evaluating their systems and processes and improving services to their students.

The Overperformers

University	Overperformance Value
Maryville University of St. Louis	99
University of La Verne (CA)	85
St. John Fisher College (NY)	82
Andrews University (MI)	79
Biola University (CA)	77
Azusa Pacific University (CA)	73
Edgewood College (WI)	70
Stevens Institute of Technology (NJ)	70
University of St. Thomas (MN)	70
Yeshiva University (NY)	70
University of Tulsa (OK)	66
Immaculata University (PA)	64
Adelphi University (NY)	59
St. Mary’s University of Minnesota	58
Mississippi State University	57
Indiana University of Pennsylvania	54
University of Dayton (OH)	54
University of the Pacific (CA)	54
Widener University (PA)	50
SUNY College of Environmental Science and Forestry	47

The Underperformers

University	Underperformance Value
Arizona State University	-71
University of Arizona	-68
University of Montana	-68
University of Colorado–Denver	-57
Virginia Commonwealth University	-50
University of North Carolina–Charlotte	-49
University of New Mexico	-48
University of Colorado–Boulder	-46
University of Oregon	-44
Oregon State University	-41
University of Maryland–Baltimore County	-41
George Mason University (VA)	-40
University of Illinois–Chicago	-37
University of Kansas	-36
Indiana University–Bloomington	-35
Montana State University	-35
San Diego State University	-35
University of Alabama–Birmingham	-35
University of Missouri–Kansas City	-35
Kansas State University	-34

Source: U.S. News Analysis Shows Universities Where Reputation, Rank Don’t Match

by Diane Tolis and Robert J. Morse December 12, 2013.

Jobs and Output Data Point to Stronger Growth for Colorado

December 20, 2013December 20, 2013 horvath Leave a comment

Earlier today, the Bureau of Labor Statistics released November jobs data for Colorado. As measured by increased jobs and decreased unemployment, the update showed the improvement in the economy is geographically broad-based. Most states are enjoying the recovery!

Specifically the highlights from the jobs data are:

Wage and salary employment increased in 43 states and decreased in 7 states and the District of Columbia.
Decreased unemployment rates were recorded in 42 states and the District of Columbia compared to a year ago, 1 state was flat and 7 states were higher. Nationally, November unemployment registered 7.0%, down 0.8 percentage points from a year ago.
In Colorado the November unemployment rate was down 1.1 percentage points from the same time last year (7.6% compared to 6.5%).

A stronger national economy bodes well for Colorado.

Earlier in the month the Bureau of Labor Statistics indicated its projection models had understated the rate of job growth in the state in 2013. Latest estimates project the state will actually add 60,000 to 65,000 jobs this year.

More good news came today when the Bureau of Economic Analysis revised Q3 GDP upward to 4.1%. Exports and business and consumer spending were stronger than anticipated.

The stronger jobs and output data suggest the impacts of sequestration, the partial government shutdown, and the fallout from the earlier budget and debt ceiling debates may have had less of a net impact than originally thought.

For the first time in 6 or 7 years, Colorado and the U.S. will be entering a new year with a solid foundation for growth. If that foundation remains in place, there is reason to believe that Colorado will add at least 65,000 jobs in 2014.

Leeds Economic Forecast Points to Slower Growth in Year Ahead – AGAIN

December 12, 2013December 12, 2013 horvath Leave a comment

On December 8th Professor Richard Wobbekind and the Leeds School of Business (SOB) released the 49th annual economic forecast for Colorado. Unfortunately, the fundamentals of the 2014 outlook were as questionable as the 2012 and 2013 forecasts.

For three consecutive years (2012 to 2014) the SOB has projected fewer jobs would be added in the coming year, even though Real GDP was predicted to increase significantly in two of those three years.

A summary of the SOB forecasts from 2012 to 2014 are provided in the table below.

Leeds School of Business Forecast – US Real GDP and Colorado Employment
Year	Change in Real GDP	Change in State Employment
2012	In 2012 Real GDP will show a significant increase in the rate of growth for 2011	Fewer jobs will be added in the coming year
2013	In 2013 Real GDP will growth at about the same rate as 2012, a slight decrease is possible	Fewer jobs will be added in the coming year
2014	In 2014 Real GDP will increase at a rate almost double the 2013 rate	Fewer jobs will be added in the coming year

Source: SOB BEOF publications

The actual data for 2012 and preliminary data for 2013 are provided in the table below.

Performance of the Economy – US Real GDP and Colorado Employment
Year	Change in Real GDP	Change in State Employment
2012	The rate of growth of 2012 was significantly greater than the rate of growth for 2011	More jobs were added in 2012 than 2011
2013	The 2013 preliminary rate of growth was significantly lower than the rate of growth for 2012.	More jobs were added in 2013 than 2012
2014	To be determined	To be determined

Source: BLS, BEA, CBER

A historical look at the recoveries from the last three recessions is instructive.

After the 1991 recession, Colorado added jobs at an increasing rate for three years (1992 to 1994). This recovery was exceptionally strong. Job growth in 1994 was second highest in state history.

Following the 2001 recession, Colorado “added” jobs at an increasing rate for four years (2003 to 2006). That rate of recovery for that period was anemic, but improving. Continued job growth at an increasing rate was cut short by the 2007 recession.
After the 2007 recession, Colorado has “added” jobs at an increasing rate for four years (2010 to current). The rate of recovery has been so-so. In other words, there is a strong likelihood that job growth will continue at an increasing rate in 2014.

The saying “Every blind squirrel finds an acorn now and then” can be applied to the 2012-2014 SOB forecasts. If they continue to predict the state will add fewer jobs next year than this year, at some point they will be correct. Will 2014 finally be the year they are right?

We can only hope the SOB is wrong again!

Lola and Sir Germs-a-Lot Play a Role in Better Dental Care for Colorado Children

December 6, 2013December 6, 2013 horvath Leave a comment

The Denver Post recently reported that about 335,000 Medicaid adults will gain access to dental care in the spring of 2014 and tens of thousands will be added to insurance rolls through Obamacare. In addition, there may be thousands of privately insured children who will have access to dental care as a result of the state health exchange.

The good news is that benefits will be available to more state residents. Surveys indicate that more than 30% of Colorado adults haven’t seen a dentist in the past year, and 20% to 25% of children have high levels of decay-inducing bacteria.

The bad news is there will not likely be enough dentists to service the new patients. Quite often, dentists are not willing to service the patients because of the bureaucracy, paperwork, and lack of revenue from the government funded programs.

Data from the Bureau of Labor Statistics shows Colorado had about 2,700 dental establishments in 2012. The Post article indicated there are about 3,600 dentists, based on statewide surveys and licensure records. Only about 1,000 are actively enrolled as Medicaid providers.

To address this challenge the article indicated the Colorado Dental Association is encouraging its members to accept at least 5 Medicaid patients in 2014. While CDA is to be commended for their efforts, the initial impact will be minimal. To improve overall access there is a pressing need to minimize the hassle of dealing with the state and federal programs.

Other approaches to address the shortage of dentists focus on prevention.

Special interest groups have taken a somewhat draconian approach to addressing the issue of dental hygiene by waging a war on sodas, sugar drinks, boxed cereal, and other foods with heavy sugar content. These efforts include such measures as lobbying for increased taxation on targeted foods and advocating boycotts and reduced availability of them.

A logical approach includes efforts to educate youngsters about the values of good dental hygiene. This includes programs and demonstrations by dentists and dental hygienists to advise younger patients about the benefits of caring for their teeth and how to do that in a disciplined manner.

As well it includes fun, educational products such as the recently published children’s book, Lola and Sir Germs-a-Lot (Available on Amazon.com and Xlibris.com). The book tells a story of a young girl who became complacent about brushing her teeth – and she paid the price. Most parents and children can relate to Lola’s exploits. The author’s subtle approach provides a gentle reminder that kids must brush their teeth on a regular basis.

The bottom line is that proper dental hygiene is important to everybody and there are not enough dentists. Improved dental hygiene is a function of better diets, better prevention, and better access to quality dental care. Just ask Lola!

Sources: The Denver Post (“Flood of new dental patients in Colorado meets trickle of caregivers” November 29, 2013); Bureau of Labor Statistics.

CPIA Announces Photonics Company of the Year – Ball Aerospace

December 1, 2013December 1, 2013 horvath Leave a comment

At their annual meeting on October 15, the Colorado Photonics Industry Association (CPIA) named Ball Aerospace & Technologies Corporation as the 2013 Colorado Photonics Company of the Year. The company was selected from more than 200 companies in the aerospace, renewable energy, defense, life sciences, telecommunications, and electronics industries involved in photonics, or light-based, technologies. Ball is the only company to repeat as winner of this prestigious award, having previously won in 2002.

Ball is one of many companies that make outstanding contributions to the Colorado photonics cluster. These companies bring international attention to Colorado as a place to conduct business.

Reasons for recognizing Ball span several years and include the following:

The Deep Impact project: Ball designed and manufactured the optical spectrometer that observed the collision between the comet Temple I and the man-made interceptor.
Kepler: Ball designed the telescope that has detected several hundred earth-like planets from other solar systems.
Ball designed every currently operational instrument on the Hubble Space Telescope.
Ball completed delivery of the next generation Operational Land Imager (9 band earth observing spectrometer).
Ball designed the optical System for the DoD Space Based Surveillance System that went operational in 2012.
Ball designed the Ozone Mapping Profiler Instrument that went operational in 2011 on the Suomi Weather Satellite.
Ball designed and built the camera system on the latest Mars Rover.
Ball is near completion of the 10-segment Primary Mirror Assembly for the James Webb Space Telescope, a telescope that will allow researchers to literally see back to the beginning of time (although not until the year 2018).

Ball Aerospace was started in Boulder County in 1956, about a year before the start of the great space race.

Colorado Jobs Data for October – Mixed Message

November 24, 2013November 24, 2013 horvath Leave a comment

The recent BLS jobs report for Colorado had mixed news.

The good news is that Colorado will see solid job growth this year. The bad news is that jobs are being added at a slower rate than earlier in the year.

On the street, most Colorado business owners are not pleased with government leadership, but they are generally upbeat about the economy.

The unemployment rate was flat from February through August. The slight declines in September and October are a sign that the rate continues to slowly move downward. BLS reports the state rate is lower than the rate for the U.S.; however, it is not statistically different than the U.S. (The latest state rate is 6.8% compared to 7.3% for the U.S.)

On a positive note, the number of unemployed workers has fallen to 185,500. This is the lowest number of unemployed since February 2009; however, it is more than twice the pre-recession number.

The wage and salary data is mostly positive. The average number of jobs added for the first 10 months of 2013 is about 56,400 greater than the same period last year. Unfortunately, jobs have been added at a declining rate since March.

Colorado is on track to add about 55,000 jobs for 2013, an increase of 2.3%. The question is, “Given this downward trend in the number of jobs being added, what lies ahead for 2014?”

All jobs are important; however, there is concern there are too few jobs being added that “create” other jobs or bring in wealth from the outside. The lack of a sufficient number of new primary jobs may be the reason for the decreasing rate of growth. State and local economic developers are working hard to address this issue.

It is unlikely the state numbers were noticeably impacted by the September flooding and the limited Government shutdown. The flooding clearly had a negative impact on the local economies and the limited government shutdown may have caused inconvenience for cities and companies that are heavily dependent on federal funding. These events will likely have a greater impact on overall output than employment.

For the most part, the latest jobs report bodes well for the state.

Pain at the Pump – Will it be Less in 2013?

November 19, 2013November 19, 2013 horvath Leave a comment

Since 2009 Americans have felt the pain at the pump. The angst for Coloradans has been slightly less.

For the past 52 weeks, the average cost to purchase 15 gallons of gas per week was $2,760. Believe it or not, this was about $1 more than the previous 52 weeks, not adjusted for inflation.

As well, the cost for Coloradans was about $111 less than the U.S. total for the past 52 weeks.

Sticker shock wasn’t as bad as it was two years ago. This is good news for consumers, but not so good news for the companies who rely on higher oil prices and governments who rely on severance and other taxes for revenue.

Surprise – U.S. Employment up by 200,000/month from August to September

November 12, 2013June 19, 2014 horvath Leave a comment

On November 8th the Bureau of Labor Statistics reported the U.S. employment was up by 204,000 in the month of October. This was a shock to many, particularly given the weak ADP numbers published in late October.

The BLS delivered a second surprise by bumping up the net jobs added for August and September. Unfortunately, the number of unemployed in October was only 44,000 less than August, and the unemployment rate, 7.3%, was the same for both months.

For the first 10 months of 2013, U.S. employment increased at an average rate of 186,300 jobs per month. This is above the monthly average for 2012 (185,000) and 2011 (175,000).

U.S. job growth was strong in the first quarter of 2013, but the increases became more tepid as the year progressed. Average job growth for the past three months is slightly above 200,000. The December release will show the extent to which Congress’ game of chicken with the Federal budget derailed this momentum.

U.S. Employment Situation

Amendment 66 Results – Address School Reform in a Sensible Manner

November 6, 2013June 28, 2014 horvath Leave a comment

Education of our youth is critical to the growth of the economy!

Yet, Coloradans voted down Amendment 66, a proposal to raise taxes by nearly $1 billion to fund reforms in K-12 education.

Colorado voters support education, but Amendment 66 was overwhelmingly rejected for reasons that did not directly relate to the education of our youth:

The Amendment would have become a drag on the state economy. It was not economically viable.
Supporters conveniently misrepresented how Amendment 66 would benefit students.
Other supporters portrayed the current K-12 system as being broken – there are problems, but it is not broken.
As the campaign unfolded, the Colorado Education Association’s support of the amendment was clouded by the possibility CEA would file a lawsuit that would undermine elements of Amendment 66 if it passed.
A surprising number of educators did not support it.
Supporters of the amendment received over $10 million to run their campaign, including significant funding from out of state.
LOTS of money was thrown at the school board race in Adams County. A week before the election, it was disclosed that one of the candidates, Amy Speer, was not eligible to run for her position because she didn’t live in the district she sought to represent.

As the campaign progressed, Amendment 66 supporters became more desperate and their credibility dwindled. Supporters tried to shame the Colorado electorate into voting for Amendment 66 because it was for “the good of the kids”. That was insulting!

When official votes are tallied, Amendment 66 is projected to lose 65% to 35%. To put the vote in perspective:

In the 1964 presidential election Lyndon Johnson received 61.1% of the votes and Barry Goldwater received 38.5%.
In the 2002 Colorado gubernatorial race, Bill Owens received 62.6% of the votes and Rolliie Heath received 33.7%.
Eleven states voted to secede from the state of Colorado. Five of the 11 states voted to secede; however, Weld County turned it down by a vote of 58%-42% and the state remains whole. Said differently, there was a greater likelihood of 11 states seceding than A66 passing.
Amendment 66 received a majority of votes in only 2 of 64 counties -it won by slight margins in Boulder and Denver.
Amendment 66 lost by 60+% in 55 of 64 counties.

The loser in the race was not the kids, the state of Colorado, nor a few politicos.

Amendment 66 left the Colorado electorate with a bad taste in their mouth for the education process, the teaching profession, and those who advocate for improved funding or school reform. It time to address school reform in a sensible manner.

ADP Report – Mid to Large Size Companies Adding Most Jobs

October 31, 2013October 31, 2013 horvath Leave a comment

ADP announced that the U.S. Private Sector added 130,000 jobs in October.

Ugh!

To add insult to injury, the September data was revised downwards from 166,000 to 145,000.

Ugh! At least the number is positive.

The ADP data reports that since the official end of the Great Recession the Private Sector has added 6,367,080 jobs. The number of jobs added by company size category follows.

1 to 19 employees

1,251,500 jobs added
19.7% of total jobs added
4.4% growth since the end of the recession.
(See chart below for jobs added since recession).

20 to 49 employees

972,200 jobs added
15.3% of total jobs added
5.7% growth since the end of the recession.

50 to 499 employees

2,328,900 jobs added
36.6% of total jobs added
6.1% growth since the end of the recession.

500 to 999 employees

446,900 jobs added
7.0% of total jobs added
6.0% growth since the end of the recession.

1,000+ employees

1,357,600 jobs added
21.5% of total jobs added
8.2% growth since the end of the recession.

Jobs have been added across all size categories; however, the data suggests it is the well-established companies that have led the recovery from the Great Recession, not the small businesses or entrepreneurs.