January 2006
Employer confidence expected to fuel hiring pace in 2006
The new year is ushering in renewed economic optimism among employers in the seven-county metro area, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for January 2006.
Average annual employment in Metro Denver for 2005 was 25,400 positions higher than in 2004, a little more than half of the total increase of 46,700 jobs at the state level. Employment gains were greatest in the Professional & Business Services (+6,900 jobs), Education & Health Services (+4,300 jobs), Leisure & Hospitality (+3,800 jobs), and Natural Resources & Construction (+3,600) sectors. All industry groups are tracking at higher levels compared to last year with the exception of Information, which posted an average annual decline of 3,800 jobs.
And, according to a recent Manpower Employment Outlook Survey, Metro Denver's hiring pace is expected to increase in the first quarter of 2006 while fewer companies plan to reduce staffing levels. About 30% of the companies interviewed plan to hire more employees in the first quarter, up from 23% in the fourth quarter of 2005.
“We have finished 2005 with every indication that the market challenges our regional economy faced have been 'rung out' and that we are poised for a strong 2006," said Tom Clark, executive vice president of the Metro Denver EDC.
On the national economic scene, Colorado ranked fourth in the fifth annual State Competitiveness Report released by Suffolk University’s Beacon Hill Institute. The Institute defines competitiveness as “the policies and conditions that ensure and sustain a higher level of per capita income and its continued growth.” The 2005 Report measures competitiveness using 42 variables in eight categories. Colorado ranked well in various technology, business incubation, and environmental policy subindexes.
The first of the year-end 2005 data is released in the January Monthly Economic Summary. This report includes year-end data for home sales and commercial real estate. Year-end data points for employment, consumer activity, and home construction will be released between now and March.
In Metro Denver, 12 of the 18 indicators moved in a positive direction for the month, up from eight last month. Annualized activity remains fairly consistent with 13 economic variables posting positive changes for the year, down from 15 indicators last month.
The residential real estate market continues to impact our local economy - three of the five indicators not posting annual improvements this month are all related to the residential real estate market: home sales activity, home foreclosures, and home construction.
“While the residential real estate market has experienced challenges, we are encouraged that our slower housing growth will actually help us weather the 'housing bubble' expected to hit several other residential markets like Phoenix, San Francisco, and San Diego," said Clark.
The Monthly Economic Summary provides a snapshot of metro area economic activity and its relation to regional and national economic trends.