Colorado Economy Archives - Page 15 of 20 - Colorado-based Business and Economic Research

Leeds School Annual Forecast Calls For Slowdown in Colorado Employment Growth

December 5, 2011December 5, 2011 horvath Leave a comment

The Leeds School of Business released its 47th annual business forecast, calling for the U.S. economy to grow at a faster rate and a modest slowdown in the growth rate of the state economy in 2012. The report projected a sharp increase in U.S. Real GDP growth, from 1.8% to 2.4%. Surprisingly that gain translates into an increase of only 23,000 workers in Colorado. This follows on the heels of job gains of 27,500 in 2011.

Job losses are projected for the Manufacturing, Information, and Financial Activities sector. After manufacturing gains in 2011, it is disappointing to see the projected return to negative growth. Evidently renewable energy, which sparked manufacturing growth in 2011, will either flatten or taper off in 2012. Consolidation in the other two sectors will drive further cutbacks.

According to the Leeds School, 2012 growth will be driven by the Health Care and Professional Business Services sectors. Smaller gains will occur in tourism and construction. It is encouraging to see the Construction sector on the positive side of the ledger again.

Although, the 2011 preliminary employment estimates will not be updated until March 2013; the Leeds estimate of 27,500 additional jobs is reasonable. In evaluating their projections for 2012, it is interesting to see how they fared with their 2011 forecast.

1. The Forum (UCCS) error -2,500
25,000 jobs (10/2/2010).

2. OSPB error -3,200
24,300 jobs (12/2010).

3. BBVA Compass error -5,500
22,000 jobs

4. (tie). Legislative Council error -7,500
19,900 jobs (12/2010).

4. (tie). BBER error -7,500
(15,000 to 24,999) (10/2010).

4. (tie) Jeff Thredgold’s Small Business Index error +7,500
(33,000+) (Autumn 2010).

7. CSU Economics Class error – 8,500
19,000 jobs (11/16/2010).

8. CU Colorado BEOF error -17,400
10,100 jobs (12/6/2010).

9. Demographer’s Office error -27,500
No growth (11/5/2010).

10. Moody’s/Dismal.com error +28,500
56,000 jobs (3/2011).

Like most forecasts, the Leeds projections have historically understated periods of growth and decline. If the Leeds pattern of error continues in 2012, then job gains above 30,000 might be more realistic. For additional information on forecast accuracy click here.

State Population Approaches 5.2 Million – State Demography Office

November 17, 2011November 17, 2011 horvath Leave a comment

On November 4, Cindy DeGroen, Projections Demographer, and Elizabeth Garner, State Demographer, presented their annual population update and key findings from the 2010 U.S. Census at the annual State Demographer‘s meeting. A sampling of the information from their reports follows.

In 2010, the state population topped 5 million. By 2012, the population will reach about 5.2 million, with about 72,300 births, 32,400 deaths, and net migration of 36,500. This represents a net gain of about 76,400 people.

The top five counties in population (July) are:
1 El Paso 627,096
2 Denver 605,722
3 Arapahoe 575,022
4 Jefferson 535,533
5 Adams 443,715

The five counties with the least population are:
60 Kiowa 1,399
61 Jackson 1,390
62 Hinsdale 847
63 (tie) Mineral 710
63 (tie) San Juan 710

The census showed that between 2000 and 2010 the state added a net of 727,935 people.
• Douglas County added 109,699
• El Paso County added 105,334
• Arapahoe County added 84,036
• Adams County added 77,746
• Weld County added 71,889
In total these five counties added 448,704 people, or about 62% of the population increase during this period.

From a municipal perspective, the following 5 cities posted the top gains:
• Colorado Springs 55,537
• Aurora 48,685
• Denver 45,522
• Thornton 36,388
• Castle Rock 28.007

The following 5 cities posted the largest losses:
• Wheat Ridge -2,747
• Englewood -1,472
• Lakewood -1,146
• Walsenburg -1,114
• Lamar -1,065

From this sampling of data it is clear to see that the state is evolving rapidly, as certain areas gain and lose population and workforce.

State to Add 28,000 Jobs – State Demography Office

November 11, 2011November 11, 2011 horvath Leave a comment

On November 4, State Economist David Keyser unveiled his annual economic forecast at the 29th Annual State Demography meeting. In his report Keyser stated that the economy remains fragile, but that jobs will be added an a slow rate in 2012. Growth will be in the range of 1.0%, or 28,000 civilian jobs. He projected that more than 50,000 jobs would be added in 2013.

Unemployment will remain high through 2012, about 8.4%. There will be an insufficient number of jobs added to lower the rate significantly. In addition, labor participation rates are low. As jobs are created at a faster rate, the participation rate will pick up. That in turn, will keep the unemployment rate at a high level.

The painfully slow recovery will be extended by the lack of growth in per capita personal income. Stronger income growth is needed to spur on increased demand for goods and services. Real PCPI is projected to grow at 2.8% and 2.2% respectively in 2012 and 2013. On a positive note, the state inflation rate will remain around 2% in 2012 and bump up to 3% in 2013. Rising energy prices will play a role in the increase.

Looking ahead to 2012, Keyser sees tourism and retiree driven jobs as bright spots. As well, agriculture and the extractive industries, particularly oil and gas, will have strong years. In fact Keyser also sees an uptick in construction, as both single family and multifamily permits will more than double. Total permits will approach 30,000, up from about 13,000 in 2010. It should be noted that the mix of permits will be different than in the past. It will include a greater concentration of multifamily units. On the downside, Keyser points to weakness in investment and wealth driven jobs.

Click on State Demography Office for further information about their work.

ATFilms – CPIA Company of the Year

October 31, 2011October 31, 2011 horvath Leave a comment

The Colorado Photonics Industry Association (CPIA) hosted its 14th annual membership meeting on October 25 to showcase photonics research being conducted at Colorado’s universities. As well, CPIA also recognized Advanced Thin Films as its Company of the Year.

ATFilms specializes in advanced coating technology available, ion beam sputtering (IBS), and mastering the deposition of precise, dense, and durable films. As well they manufacture a full line of superpolished optical substrates with less than one angstrom RMS micro-roughness.

In addition to hearing presentations by each of the state’s research universities, there was a poster session that featured 26 research projects being conducted by students. Last year, CSU swept the top spots in the poster session; this year the top finishers were from CU and CSU. This year’s winning posters were:

First   “Photolithography Process using Extreme Ultraviolet Lasers”/Wei Li
Second   “Surface Acoustic Wave Metrology using EUV Light” /Kathleen Hoogeboom-Pot
Third   “The Development of Multiparametric Microfluidic Flow Cytometry for Directed Evolution of Red-Fluroescent Proteins” Kevin M. Dean.

For the uninitiated, photonics is an enabling technology that is a driver of the state and national economy. The technology is the foundation of the aerospace, biomedical, homeland security, and medical device industries.

Photonics-based technologies impact our daily lives, although we may seldom recognize it. Something as simple as a mirror is a photonics device. Twenty years ago devices such as infrared remote controls, light-emitting diodes, sensors, and laser printers were novelties. Today they are common place. To learn more about the prevalence of photonics in our daily lives click here.

Increased DIA Passenger Traffic Supports Strength of Tourism Sector

October 19, 2011October 19, 2011 horvath Leave a comment

Throughout most of the year, the Leisure and Hospitality Sector has been a leader in job creation.. Today, DIA released passenger traffic data that further supports the importance of the tourism sector in the state’s recovery.

In August 5,037,947 million travelers passed through DIA. This is a record for August and it marks the first time the airport has had back-to-back months with more than 5 million travelers.

Year-to-date data through August shows that about 30.2 million passengers have passed through airport gates in 2011. This represents a 2.8% increase, or 794,347 travelers, over the same period in 2010.

If this level of activity continues, about 53 million passengers will travel through DIA in 2011. This is clearly a sign that people from around the world have increased their travel through Denver for business and personal reasons.

Sectors Losing Jobs Have Higher Wages

October 2, 2011October 2, 2011 horvath Leave a comment

Through the first 8 months of the year there are 7 sectors of the economy that have lost a net total of 25,100 jobs, compared to the same period last year.

Construction                                     -8,800
Financial Activities                            -4,200
Federal Government                         -3,400
Information                                       -3,400
B-to-B (Not Employment Services)  -2,600
Local Government (Not K-12)         -1,600
K-12 Education                               -1,100

These sectors account for 33.3% of total employment. Average wages for this mix of workers is about $56,600 compared to average annual wages for all employees of about $47,900 (calculations based on 2010 QCEW data). In other words, the average wages for the sectors that are losing jobs is significantly greater than the overall state average, based on 2010 data.

The 2011 prognosis is that each of these sectors will show job losses for the year (2011) and that average annual wages for the group will remain well above the overall state average.

For a comprehensive review of the Colorado economy visit the CBER website.

After 8 Months, 7 Sectors Show Job Gains

September 26, 2011May 20, 2014 horvath Leave a comment

Through the first 8 months of the year there are 7 sectors of the economy that have added a net total of 34,900 jobs, compared to the same period last year.

Tourism +11,600
Private Education and Health Care +9,600
Professional and Scientific +4,100
Extractive Industries +3,000
Wholesale Trade +2,300
Employment Services +2,300
Higher Education +1,900

These sectors account for 40.6% of total employment. Average wages for this mix of workers is about $43,600 per worker, compared to average annual wages for all workers of about $47,900 (calculations based on 2010 QCEW data). In other words, the average wages for the sectors that are adding jobs is less than the overall state average.

The 2011 prognosis is that each of these sectors will show job gains for the year (2011) and that average annual wages for the group will be less than the overall state average. For a more comprehensive review of the Colorado economy visit the CBER website.

10 Years After 9/11 – Summary of Impacts on Colorado

September 14, 2011May 20, 2014 horvath Leave a comment

This is the final post summarizing the way the economy has performed in the 10 years after 9/11. The series of posts began in early August and has included a review of tourism; construction, housing, and financial activities; retail sales and personal services; high tech and the military.

Tourism

• From an employment perspective, tourism (accommodations and food services) has expanded in Colorado since 2001. Competitiveness within the industry has increased, as evidenced by the flat growth in output.

• In Colorado, the airline industry was “restructured” after 9/11.

• The impact of 9/11 was short term. These declines may have been offset by gains in emerging industries,
such as teleconferencing and other means of communications.

Construction, Housing, and Financial Activities

• Construction, housing (prices and foreclosures), and finance are all interrelated. A portion of today’s
problems can be tied to 9/11 and the 2001 recession. There was a mindset that the country could “spend” its way back to prosperity. That mindset created problems when overextended consumers lost their jobs or saw declines in the values of their houses.

• Construction output peaked in 2000 and has dropped-off since. From an employment standpoint, there was a slight decline during the 2001 recession. A much more severe drop-off began in 2008.

• Creative financing allowed financial employment to grow throughout the 2001 recession. Some of the
products that spurred that growth were problematic in the second half of the decade. In turn, layoffs in the
financial sector began in 2007 and have continued since. These declines are a function of lack of activity,
consolidation, automation, bank failures.

• Year-end equity market values are about the same in 2010 and 2000.

Retail Sales and Personal Services

• Sales of retail goods and personal services has become more competitive during the past decade, yet
employment has remained relatively flat. Increased savings in recent years may be an indicator that consumers learned from the 2001 and 2008 recessions that they have limited resources that can be allocated to the consumption of goods and services.

High Tech (Manufacturing; Information; and Professional Technical Services)

• Employment has dropped significantly as a result of increased efficiencies, outsourcing, and offshoring. At
the same time output has risen dramatically. MIPTS is the driver of the state economy. 9/11 played a role in the adoption of high technology goods and services (surveillance, security, teleconferencing, etc.)

Military
• The U.S. military has increased their dependence on Fort Carson since 9/11.The movement of troops in and out of the base have had a noticeable impact on the El Paso County economy.

The “Lost Decade” was a turning point in the structure of the U.S. and Colorado economies. While 9/11 did not cause this transformation, it played a role in accelerating the change that occurred in some industries.

For additional information, see The Colorado Economy Ten Years After September 11, 2001 at cber.co in the Special Reports section.

10 Years After 9/11 – High Tech Employment Falls Off

September 8, 2011May 20, 2014 horvath Leave a comment

For the past 20+ years, Colorado’s high tech cluster has been a driver of the state economy, creating high-paying primary jobs that spawn growth in other sectors of the economy. During much of that time Colorado has been recognized as one of the top states in the country for its number of high tech workers, on a per capita basis.

There is no NAICS code that reports advanced technology employment. Rather than being called an industry, it is technically a cluster because it’s companies crosses a number of sectors. They vary from goods producers and extractive industries to service providers, such as engineers and architects. The high tech cluster has varied in size from 120,000 to 220,000 workers over the past two decades. Currently it employs about 172,000 people.

Because it is a cluster, special calculations are necessary to determine employment levels. Rather than perform these calculations, a good proxy of the presence of high tech or advanced technology, from both an employment and output perspective, is the performance of the Manufacturing; Information; and Professional, Scientific, and Technical Services (MIPTS) sectors.

The two recessions during the past ten years provided advanced technology companies with motivation to increase productivity through outsourcing and investments in capital. As a result employment declined precipitously, while output showed impressive gains.

In 2000, MIPTS employment was 451,100 workers. About 87,400 jobs were lost by 2010, or an annualized decline of -2.1%. At that point, the MIPTS sectors accounted for 363,800 workers or 16.4% of total employment.

It remains to be seen what impact the sharp decline in employment will have on Colorado’s MIPTS and the high tech cluster. There are concerns that its dropoff will adversely impact the supply chain within the state as well as the base of trained workers. Can Colorado maintain its innovative edge? Time will tell.

10 Years After 9/11 – Creative Financing Fizzles

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

In early 2003 a reporter posed the question, “Looking back, what did you miss in forecasting the 2001 recession?” In hindsight, there were two signals of greater problems.

1. Colorado construction output began to decline in 2001.
2. Employment in the Colorado Financial Activities Sector moved counter to total employment during the 2001 recession.

At that time, it was difficult to understand these trends because they were not fully developed. In the months prior to 9/11, the economy had slowed, but remained strong. Very few noticed the slowdown in construction output and those who did thought it to be nothing more than a bump in the road.

By mid-decade it became more apparent that the strength of the construction industry was waning. T-Rex was winding down and the only major activity was a smaller highway project in Colorado Springs, the Comanche Power Plant in Pueblo, and a mixture of school construction additions or improvements. In addition, housing permits, and valuation began to level off.

By 2007, housing construction began to slip and by 2008 it was clear that the industry was faced with more than a “bump in the road”. Between 2007 and 2009, 1-in-6 of the private sector jobs lost were either in construction or construction-related industries.

In hindsight, more economists and bank officials should have questioned why employees were being added in the Financial Activities Sector during a downturn. When 9/11 occurred, the economy came to a grinding halt for several days. Americans were encouraged to keep spending in hopes the country could consume its way out of the recession. At the time, that seemed to be the right thing to do.

Creative financing products (HELOCS, 0% financing, interest only loans, reverse mortgages, and others) were designed to stimulate consumption. Demand for these products increased in popularity because they allowed Americans to purchase whatever they wanted. To meet that demand, financial employment expanded between 2000 and 2007.

In 2007 a series of problems began to surface, the popularity of these products dropped off, and employment in the sector reversed trend – sharply. The industry experienced a complete melt-down – collapse of large financial institutions, the bailout of major banks by national governments, bank consolidations and closures, declines in consumer wealth, failure of top businesses, volatile equity markets, declining property values, foreclosures and evictions, and much lower interest rates.

In hindsight it is now easy to see that in 2002 there were signals that greater problems lay ahead. Given the circumstances, it is also easy to see why we looked past those warnings.