September 2008
Metro Denver economy remains internationally recognized despite nationwide woes
Metro Denver’s economic growth continues to be challenged as nationwide housing and credit troubles limit local hiring, home buying, and retail sales. Yet the region remains an internationally recognized center for the energy and aerospace industries, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for September 2008.
Metro Denver employers cut 9,900 positions in July after adding roughly the same number of jobs in the prior month. Six of the region’s 11 industry supersectors reported job losses between June and July, although reductions in state and local government – specifically seasonal reductions in education – accounted for much of the overall employment decline.
On a year-to-date basis, each Metro Denver supersector has added jobs except manufacturing and financial services, but the overall employment growth pace continues to slow. Specifically, the region’s year-to-date job growth rate declined to 1.5 percent in July from 1.6 percent in June. As it has in prior months, Metro Denver’s year-to-date job growth rate remains slightly behind the statewide growth pace (1.7 percent) and ahead of the national average growth rate (0.3 percent).
Total Metro Denver retail sales continue to expand at a steady pace, although equally steady increases in consumer prices – particularly for gasoline, food, and other staples – are undercutting real revenue and sales tax collections. Total retail sales through the first half of the year declined in Arapahoe County and the City and County of Broomfield, but the remaining five counties in Metro Denver reported year-to-date gains ranging from 2.4 percent to 13.1 percent. Overall, Metro Denver retail sales increased 4.1 percent through the first half of the year and 0.4 percent after adjustment for inflation.
Recent business activity in Metro Denver’s industry clusters largely reflects national trends. Specifically, businesses tied to the household sector continue to struggle while energy companies report robust growth.
Spokespeople for Denmark-based Vestas Wind Systems A/S recently announced plans to expand the company’s U.S. presence with two new facilities in Brighton. One facility, a wind turbine blade manufacturing plant, will supplement the company’s existing blade facility in Windsor. The second factory will assemble nacelles, or housings for turbine generators and other sensitive components. The nacelle factory will be Vestas’ largest and the first such factory in the U.S. Combined, both facilities could bring more than 1,300 jobs to Brighton when fully operational in 2010.
Vestas will also expand its Colorado presence with a turbine tower manufacturing facility in Pueblo. Company spokespeople say the tower factory will be the largest of its kind in the world and could ultimately employ more than 450 workers. The factory is scheduled to open in 2009.
California-based Rentech Inc. recently opened the nation’s first synthetic diesel and jet fuel plant in Commerce City. If the fuel produced by the demonstration plant passes further federal testing and wins government approval, the company may have the product certified for airline use.
"In short, Metro Denver’s dynamic and innovative industry base continues to support the region’s economy through challenging times," stated Tom Clark, executive vice president of the Metro Denver EDC.
Thanks to such high-profile projects, Metro Denver’s aerospace community is rapidly gaining an international reputation. British satellite company Surrey Satellite Technology Limited recently opened its new U.S. headquarters in Douglas County, and officials say they chose the Metro Denver location for its well-developed space industry and military installations.
As in many other metropolitan areas, falling home prices remain one of the greatest challenges in Metro Denver. Region-wide home prices continue to trend down, although home sales figures are increasingly solid and the foreclosure trend could soon stabilize. Overall, 10 of 18 indicators showed positive trends for the month, compared to nine positive indicators in the last report. Annual indicators are still broadly negative, as four of 18 indicators moved positively in both this and the prior report.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.