State economy shows signs of improvement

Colorado’s economy continued to grow in March for the 41st straight month, according to the business conditions index from the Goss Institute for Economic Research.

“Growth among manufacturing firms in the region more than offset slowing economic conditions among energy firms, said Dr. Ernie Goss, director of the institute. “ Durable goods manufacturers experienced healthy growth in business growth for the month.

The Goss Institute conducts the monthly survey for Supply Management Institutes in the three states comprising the Mountain States region – Colorado, Utah and Wyoming. Goss also directs Creighton University’s Economic Forecasting Group and is the Jack A. MacAllister Chair in Regional Economics.

Healthy growth in construction jobs led to increase in employment in the region, as did manufacuturers, he said. And wholesale prices dropped for the month.

“This month we asked supply managers how much they expected the prices for their company’s products and services to increase this year in comparison to last year,” Goss said. “On average, supply managers expect their prices to grow by 2.1 percent for 2013, or approximately the current rate of growth in the U.S. consumer price index. Thus far, the Federal Reserve’s cheap money policy is elevating inflationary pressures, but only modestly. The bigger problem in the Mountain States has been the Fed’s impact on asset prices such as farm and ranchland which continue to expand at annual rates above 15 percent for much of the region. However, the combination of good growth for the month and cooling inflationary pressure are very positive signals.”

Economic optimism is also up for the month in the mountain states, he said. Most companies say that the sequestration – budget cuts by the federal government – won’t have an impact on business.

“Another 21.1 percent reported only modest impacts, with the remaining 5.2 percent of businesses reporting significant impacts,” Goss said. “ Improvements in construction and manufacturing along with cooling inflationary pressures are having a positive impact on supply managers’ economic outlook.”

In Colorado, the economy is poised for more growth, thanks to new orders, production and sales and increases in construction.

“The state’s rapidly expanding construction industry is encouraging expansions for a broad range of industries in the state,” he said. “Durable goods producers expanded economic activity at a healthy pace for March even as energy related firms experienced slower growth for the month.”