The Colorado economy is stable and gaining strength. That’s what is coming down through the pipeline from those in the know at the state and local levels.
State Treasurer Mike Coffman released a statement on Jan. 19 that the “best reflection of economic optimism” is a forecasted 3.8 percent increase in sales and income tax that will be applied to the general fund. Coffman also reported that travel and tourism is improving in Colorado. The Colorado ski industry reported more than 2.9 million visits from Oct. 15 through Dec. 31, an increase of 8.1 percent compared to the same period last year. Passenger traffic at Denver International Airport rose last year to 39 million, a 14.1 percent jump.
The news release also included information from the Front Range Purchasing Managers Index, which measures the manufacturing sector along the Front Range. The index showed an increase from 47.2 in November to 57.1 in December. Coffman said “index numbers greater than 50 indicate a positive economic trend.”
Rocky Scott, president and chief executive officer of the Greater Colorado Springs Economic Development Corp., presented a local spin on the state of the economy at a quarterly forum on Jan. 26. He also tossed out a few statistics from last year that spelled out economic progress for the Springs.
From November 2003 to November 2004, jobs increased from 239,000 to 241,500, unemployment decreased from 5.9 percent to 5.4 percent, single-family housing permits increased from 4,834 to 5,258, sales tax collections increased from $89.9 million to $96.9 million, new car and truck registrations increased from 22,772 to 24,036, hotel occupancy rates increased from 45.3 percent to 46.1 percent and initial unemployment insurance claims decreased from 3,946 to 3,065.
Mentions of employment gains and a constructive job market are certain to raise eyebrows among those who continue to hunt for good paying positions in the Springs. However, according to the Colorado Department of Labor and Employment, the Colorado unemployment rate was 5.1 percent in December, up 1 percent from November but way below the 6 percent in 2003. Job gains rose about 3,500 during the month of December to a total of 2,411,600 – that figure is up from last year at this time.
The department of labor reported that seasonal hiring at Colorado ski resorts and the trade, transportation and utilities industry along with retail were responsible for the majority of new hires during the month of December.
In comparison, the U.S. Bureau of Labor Statistics reported U.S. unemployment at 5.4 percent in December.
According to Vectra Bank’s Colorado Small Business Index for December, job growth in Colorado will reach 2.6 to 2.9 percent in 2005, compared to 1.8 percent for the United States. During the latest 12-month period, the Vectra Bank index reported that Colorado Springs employment grew by 2,500 jobs.
Still, there are 40 people on average attending each of Pikes Peak Workforce Center’s three networking groups. Steve Fehl is the center’s network group coordinator and he said there is “more of a chance to be optimistic.” But, he said, “I am not going to say things are good; they are getting better, and fewer people are applying for unemployment benefits.”
Technology professionals, some holding out for those high-paying, high-tech jobs of the dot.com boon, comprise 50 percent of the networking groups, Fehl said. In those groups are people whose houses were foreclosed, and those who sold their cars and dipped into retirement funds to survive. Some of them still have a difficult time accepting what happened, he said.
Today, the most significant employer for the IT pros has been the defense industry, Fehl said. “Many are signing on for a period of time and then being offered extensions or permanent positions,” he said. But those who have security clearances are most likely to get the jobs.
Mark Berninger is a business technician for the Workforce Center, and he said there is a “slow trickle” of manufacturing jobs coming across his desk. “In general, there is a slight up tick in the number of jobs across the board, from service industry jobs to janitorial to administrative,” he said. Construction job orders are starting to come in earlier this year than last – mainly for skilled workers, like plumbers and pipe fitters. “We saw an outcry for skilled construction workers later in the season last year, and we are encouraging companies to start their job search earlier this year,” Berninger said.
Jeanne Cotter, public relations manager for the Pikes Peak Workforce Center, said last year the center intercepted 31,703 job applicants and year to date (the center’s program year begins in July), they’ve seen 19,746 people. “If this continues, we’ll exceed last year’s figures,” Cotter said. “But a new trend is that 6 percent of the job seekers are currently employed.”
Cotter said no matter the enthusiasm about an employment recovery, the “caveat is that many of the people who lost jobs in the high-tech industry are underemployed.” Yet, she remains cautiously optimistic: “I think things are moving in the right direction.”
Attracting good jobs to Colorado Springs will move things in the right direction, said Larry Stimpert, a professor of economics and business at Colorado College. Stimpert served on the EDC’s wealth creation task force, and he said everyone on the task force agreed that “what’s important for the Springs is the right growth – administrative, executive jobs.” He said bringing in corporate headquarters of companies like Progressive or luring major branches of corporations shapes growth in a positive way.
“We have to focus on jobs that have a competitive advantage and find sectors where there is value,” he said. “You don’t increase the wealth in a community by bringing in jobs that pay less than the average wage. We need to focus on jobs that are high paying.”
Scott listed a number of reasons on his economic update as to why the Springs might attract more corporations and high-wage earners. Some of those reasons: Colorado Springs is the sixth “hottest city” for business expansion, according to Expansion Management Magazine. Men’s Fitness Magazine listed Colorado Springs as the fifth “fittest city” in the nation. Colorado Springs is among the “Hottest Future Job Markets in the Nation” (among cities with fewer than 1 million people), according to Business 2.0. The Milken Institute ranked Colorado among states that are best poised for big economic gains. Forbes named Colorado Springs one of the 10 best, fastest growing and business friendly metro cities. And Colorado Springs is ranked in the top-10 “Digital Cities” in the nation with a population of more than 250,000.
All of the above are sound reasons to postulate good fortune for Colorado in 2005. And the following studies were instituted in Colorado Springs in 2004, adding to the bullish anticipation. An impact study completed by the United States Olympic Committee and National Governing Bodies identified 20 events to be held in the Springs in 2005, with an estimated $5.3M projected as revenue for the city.
Colorado Springs has been targeted, under the Air Force Space Command Acquisition Study, as potential re-basing sites. Fort Carson generates about $1.6 billion in earnings and provides more than 38,000 jobs per year, impacting state and local revenues by more than $87 million. The Springs will host the 2005 “State Games of America,” and business income is projected to be more than $10 million with wages and earnings at $3.8 million and sales tax totaling $239,000.
Last but not least, legislation favoring the business climate in Colorado will be back on the table in 2005, said Vickie Agler, the state director of the Colorado chapter of the National Federation of Independent Business. Agler was present at the start of the legislative session and said, “We were pleased to hear Sen. Stengel (minority leader) address and support many of the top priorities of NFIB members, including eliminating the business personal property tax, reducing tax
es and most importantly, not supporting any new health care mandates that will increase costs. We plan to join Sen. Stengel in the fight to keep the state’s current workers’ compensation reforms in place.”
All in all, as the New Year gets under way, those in the know are upbeat and hopeful of a continued economic recovery on both the local and state level.