Traffic congestion. The military. Consumer confidence. All these issues, and more, have received a great deal of attention from area economists. “We truly live in very strange economic times these days,” said Mike Anderson, director of the Colorado Springs office of budget and financial analysis.
With about 7,000 troops set to deploy to Iraq in the coming months, oil prices on the rise and daily traffic nightmares, things might appear bleak at first glance. However, experts say it’s not time to panic. The year is coming to an end and the future is, well, now.
On October 20, the College of Business and Administration at the University of Colorado at Colorado Springs hosted the eighth annual Southern Colorado Economic Forum at the Antlers Hilton. Jeff Thredgold, economist for Vectra Bank and president of Thredgold Economic Associates, was the event’s keynote speaker. “The global economy is doing well,” he said. His optimism extends to the United States and Colorado.
He said he expects employment levels around the state to improve in the next year. “Inflation is not a big issue for years to come,” Thredgold said. He advised that financial institutions must be willing to make loans and consumers must be willing to spend for economic growth to occur.
Fred Crowley, senior economist for the forum, and Tom Zwirlein, director of the forum addressed topics including the military, traffic congestion and higher education during the main panel of the forum. “The military is a very stable employer,” Crowley said. The military has a local economic impact of about $3 billion, Crowley said. When thousands of troops deploy, their buying power goes with them.
Zwirlein told attendees that, because of high traffic congestion, El Paso County has the worst journey to work time in the state. The forum, a University of Colorado at Colorado Springs and community supported research effort, determined the journey to work time for every county in the state. The results were determined by adjusting for the number of working individuals in each county and analyzing that figure in relation to the ratio of a county’s size to total lane miles. The journey to work time in El Paso County was found to be 1.98 times worse than that of Denver County and 2.18 times worse than Boulder County.
A series of concurrent panels were held during the forum, one of which was “Transportation in Colorado and Colorado Springs.” Dan Stewart, chairman of the Pikes Peak Transportation Coalition and Chamber of Commerce Transportation Committee, said it is time to improve the state of transportation in Colorado Springs and surrounding areas. He proposed a project that would improve connectivity from Interstate 25 to the Colorado Springs airport.
Bus service in the city also could use a boost, Stewart said. He told panel attendees that the city needs to implement more frequent bus services and quicker bus trips. An expanded service area and creating express routes from outlying areas, plus the addition of park and ride lots for example, would benefit thousands of working people in the city.
Proponents of ballot initiative 1A say, if the measure passes on November 2, a number of transportation improvement projects around the city would be set in motion. Included on the proposed list of projects are the widening of Baptist Road, the creation of an interchange at Austin Bluffs and the widening of Woodmen Road.
The high cost of oil is not too high on local economists’ lists of concerns. “We are less impacted by rising oil prices today,” Thredgold said. “Our factories are more efficient, our homes, our cars and even our SUVs are more efficient.” Thredgold estimated that the price per barrel would have to reach $80 before the nation would experience an energy crisis similar to that of the mid-1970s.
Rocky Scott, president and CEO of the Greater Colorado Springs Economic Development Corporation, said he has faith in consumers and their ability to make do. “If the price (of oil) goes up, people figure out how to do things differently,” Scott said. He added that he does not anticipate lower oil prices any time soon. “We’ve seen people change their consumption habits&they have to pay more for gas, less for other products,” Crowley said.
During the main panel of the forum, Zwirlein addressed the rising cost of business in El Paso County. The forum determined that the cost of business has increased by 3.4 percent annually since 1992, mainly because of rising rents. The cost of benefits has risen twice as fast as wages since 1999, according to the forum’s report.
Both Zwirlein and Crowley are optimistic about retail sales in coming months and in the New Year. “One, the Shops at Briargate have been open for over a year, people will go there,” Zwirlein said. Several new retail stores located off Powers Boulevard, such as Galyan’s, Super Target and Cost Plus World Market, have been attracting people in droves. “Not only are these stores here, but there are stores here in Colorado Springs that had never been here before,” Crowley said. “We used to see money leave the community.” Shops that were previously not located in the city, including Banana Republic, are now in town, helping to keep business in El Paso County rather than in Denver or Boulder.
“I don’t really think that tech retail will do all that well,” Crowley said. “We’re probably a year or two away from people thinking ‘oh, I need to upgrade that.’ I don’t see any mad rush in consumers wanting to upgrade tech products in the home.”
When troops are deployed, some economic slowing may be expected. “When we send these 7,000 troops back to Iraq, they’re not going to be supporting the economy,” Zwirlein said. “Their absence will slow us down,” Crowley said.
The return of the troops, however, is definitely something to look forward to. The troop returns earlier in the year did a lot for the economy. “Everyone expected them to do four things – buy new clothes, buy a new car, paint the town red and spend time with their families,” Crowley said. When the troops returned in April, May and June, many purchased new vehicles. “We had the best three months in a row in car sales in the last 10 years I had data on,” Crowley said.
Fewer soldiers are scheduled to deploy during this round, and the forum does not expect the upcoming deployment to have as much of an effect on the local economy as the 2003-04 deployment. A slowing of job and income growth is forecast, rather than a loss of jobs and income.
National security is on the minds of most people, soldiers and civilians alike. Thredgold, Anderson and Scott perceive terrorism as a major threat to the U.S. economy. “September 11 was an attack on U.S. confidence as much as anything,” Thredgold said.
“I think it’s clear that our national security is threatened,” Scott said. “As the Northcom guys say, ‘let’s make this an away game.’”
Decreasing state support of institutions of higher education has Crowley and Zwirlein looking to the future. Both men are from UCCS, a school that is feeling the effects of a budget crunch. As state funding decreases, tuition costs to students must increase, which may leave lower-income families unable to send their children to college. “In four or five years, there will be no state support for higher education,” Zwirlein said. “We’re trying to figure out how to do more with less every year.”
Zwirlein presented information to the main panel indicating the importance of having universities and colleges in communities to help boost economic vibrancy. Thredgold said that, on average, college and university graduates earn wages about 70 percent higher than people who did not finish college.
Zwirlein framed the tie between education and prosperity succinctly: “We have to decide – do we want universities to be an engine for the economy?”