April 2008
Metro Denver's economy as a whole continues to be stable, but local businesses and consumers are increasingly concerned about the housing market correction, rising food and energy prices, and a weak national economy, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for April 2008.
While aggregate data reflect poor housing conditions for the western U.S. as a whole, the severity of the correction varies distinctly across the region. According to Metrolist, total home sales in Metro Denver increased slightly (+0.5 percent) between January and February.
New data from the U.S. Bureau of Economic Analysis show that Colorado’s per capita personal income grew by 3.9 percent between 2006 and 2007. The state's income growth rate ranked 45th-fastest in the nation and fell behind the national average growth rate of 5.2 percent. Still, Colorado's 2007 per capita income of $41,042 was 106 percent of the national average and ranked 10th-highest in the nation.
Metro Denver's milder housing correction and higher per capita income has helped local retail sales remain reasonably strong, although annual revisions to Metro Denver's data dropped 2007 growth slightly below expectations. Preliminary data suggested that the region's sales increased 9.9 percent between 2006 and 2007, while the revised series shows a nine percent gain over the year. Data users should note, though, that an upward revision to 2006 sales caused the decline in the over-the-year growth rate.
"The national economy is causing concern for Metro Denver residents, but we seem to have avoided the large drops in overall economic activity seen nationwide," stated Patty Silverstein, chief economist for the Metro Denver EDC. "Having company headquarters continually relocating to the state is a good sign the region will come through better than the nation."
The bright spot on the horizon remains the region's energy industry. British company Renewable Energy Systems Americas Inc. moved its headquarters from Texas and began operations in Broomfield; Denmark-based Vestas Wind Systems opened its first U.S. manufacturing facility in Windsor; and officials with Colorado State University unveiled its plans for its clean energy supercluster. Several other companies announced plans to add workers, expand facilities, and improve the region’s energy infrastructure.
Xcel Energy selected the City of Boulder to pilot the "Smart Grid" project, which allows customers to access real-time information on energy prices and peak use periods. Officials hope the information will help customers modify their usage and limit the burden on the city’s power grid. Phase one of the $100 million project begins in August.
A biofuels research project at the University of Colorado received a $1 million grant from the Biomass Research and Development Initiative, a joint program of the U.S. Department of Agriculture and the Department of Energy. The team will work to develop reactor systems that convert biomass to fuel.
The U.S. Department of Energy also selected Denver as one of its 12 Solar American Cities. Denver was chosen for its commitment and comprehensive approach to the deployment of solar technologies and the development of sustainable solar infrastructures, receiving $200,000 to integrate solar technologies.
Seven of eighteen economic indicators moved in a positive direction for the month, compared to eight positive indicators last month. Data for seven indicators showed positive annual trends, down from eight positive indicators in the previous release.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.