April 2007
Employment, consumer, and commercial real estate markets shine
Year-end 2006 and first quarter 2007 data suggests the employment, consumer, and commercial real estate markets continue to be Metro Denver’s shining stars compared to the still struggling residential real estate market, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for April 2007.
Total personal income in Colorado increased 6.5% in 2006, which was the 15th fastest annual increase among the 50 states. At the national level, total personal income increased 6.3% in 2006.
Total employment in Metro Denver also increased by 9,100 positions from January to February, representing the largest month-over-month gain since June 2006. The February increase helped push average employment levels in Metro Denver up 1.9% through the first two months of 2007. The Denver-Aurora MSA reported a 1.7% year-to-date employment gain through February, and a 3.6% gain in the Boulder-Longmont MSA. Colorado posted a 2.1% year-to-date employment gain in February, exceeding the national increase of 1.6%.
“This growth is pushing employers to move their new workers into new buildings, thus keeping the commercial real estate market strong as well,” stated Patty Silverstein, chief economist for the Metro Denver EDC.
Construction activity in the office sector picked up rapidly in the first three months of 2007, rising to the highest level since fourth quarter 2002. During the January-March period, about 2.23 million square feet of new office space among 76 buildings was under construction compared to 1.33 million square feet in the prior quarter and 1.21 million square feet in the same quarter last year.
Employment and income growth are also reflected in consumer confidence levels. Confidence levels in the Mountain region escalated from January to February, increasing from a revised 132 in January to a preliminary 145.1 in February. According to the Conference Board’s Consumer Confidence Index, this is the region’s highest monthly reading since October 2000 and the highest February reading of the nation’s nine regions. For the year, consumer confidence levels are up 5.2% over the same period last year.
Metro Denver employers are also confident as they plan to hire new employees at a “vigorous” pace in the second quarter of 2007, according to the latest Manpower Employment Outlook Survey. An estimated 42% of Denver area employers will add workers during the April-June period while 12% will reduce payrolls and 43% expect no staffing changes. The remaining 3% are unsure of their staffing plans.
In international business, Denver International Airport (DIA) celebrated Lufthansa’s inaugural nonstop Denver-Munich flight on March 31, which is DIA’s third nonstop flight to Europe and will have an estimated $108 million annual economic impact on Metro Denver. Mayor Hickenlooper estimates the flight could bring in more than 30,000 international visitors a year. DIA also began 2007 with its busiest January on record. Passenger traffic at DIA in January 2007 was 5.6% ahead of January 2006. DIA and area economic development officials will now increase their pursuit of a nonstop flight to Tokyo.
Recent economic data for Metro Denver reveals that 12 of the 18 indicators moved in a positive direction for the month, up from eight last month. Annualized activity was similar to last month with 12 economic variables posting positive changes for the year.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.