Colorado’s economy continues to add jobs at a higher rate than the rest of the Rocky Mountain states and the nation.
Colorado’s economy grew nearly 2 percentage points in August, from 54.8 to 56.5, according to the Goss Institute for Economic Research. The overall business conditions index, a mathematical average of new orders, production, employment, inventories and delivery lead time, is growing if the rate is above 50, which is neutral, Goss said.
And the news looks pretty good for Colorado, which is part of the three state Mountain Index that also includes Utah and Wyoming.
“The state is adding jobs at an annual pace exceeding 2 percent, or well above the region and nation. Growth in manufacturing and mining continue at a slow pace while businesses tied to construction are experiencing upturns in business activity,” said Ernie Goss, director of the institute.
Overall, the entire business index for the region points to growth during the next three to six months, he said. Employment increased in the region, particularly jobs tied to construction, he said.
“Manufacturers linked to agriculture and energy are growing at a slower pace that this time last year. On the other hand, companies tied to construction are experiencing healthy growth. Food processing firms are also expanding at a solid pace,” said Goss.
Regionally, the prices-paid index, which tracks the cost of raw materials and supplies, soared to 59.2 from 52.5 in July.
“Our survey as well as national surveys is indicating that the period of benign inflation may be ending. Weakness in inflationary pressures has provided support for the Federal Reserve’s record expansionary money policies including its $85 billion monthly bond buying program, quantitative easing 3. I expect upturns in inflationary pressures and asset price bubbles to push the Fed to begin reducing or tapering QE3 at the September 17-18 meetings of its interest rate setting committee. This will mean that interest rates will move somewhat higher in the weeks and months ahead,” said Goss.
The federal spending sequestration is having very little impact on the outlook.
“The last six months, we have asked supply managers how the federal spending sequestration was affecting their company. In the August survey, approximately 57.1 percent of supply managers indicated that the cuts have had an impact on their company to date. This is up from 38.5 in July and 30.0 percent in June. Thus, the negative impacts according to supply managers are rising,” said Goss.