Local economy improving, but employment and income lag

In some ways, the local economy is showing its strongest performance since bottoming out in February 2009, but there are still concerns about employment and real income, according to the Southern Economic Forum’s quarterly update.

The regional manufacturing index is up 43 percent since the recession and consumer confidence is up 19 percent. Economists at the forum are concerned because employment is down 4.6 percent since the recession, and real wages have not kept up with inflation.

“Employment and wages are often among the last areas to recover after a recession,” the report said.

The local economy is expected to continue the same slow pace of recovery, because local manufacturing and technology sections are recovering more slowly than the rest of the state, the report said.

Meanwhile, gasoline prices didn’t keep down consumer spending in the Springs.

Growth in sales taxes has been trending higher in Colorado Springs, the forum’s report said.

“This is believed to be the result of pent-up consumer demand, modest gains in employment and nominal income,” the report said.

The city’s April sales-and-use tax collections report shows $28.5 million in collections from the first three months of this year, 6.18 percent higher than the first three months of last year. Building materials and commercial machine sales show the biggest increases.

However, once the Southern Economic Forum factors in inflation and population growth, those increases are not keeping up, the report said. The per-capita sales tax collections are now $1.60 lower in March than during the recession.

“City services will decline without significant revue enhancements and increases,” the report said.