January 2009
Strong long-term prospects will support a solid recovery for Metro Denver’s economy
Colorado’s economy continues to weaken as the near-term outlook for global demand and business activity remains poor. Even so, strong long-term prospects for many of the state’s key industries, a talented workforce, and a reputation for innovation will support a solid recovery for the regional economy, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for January 2009.
While President-elect Obama unveiled plans for the largest infrastructure development program since the construction of the nation’s interstate highways, economic stimulus strategies are also emerging in Colorado. Denver Mayor John Hickenlooper recently announced plans to advance the timeline on several voter-approved infrastructure projects. The projects would be finished over the next three to four years with an estimated economic impact of $200 million each year. An improvement project for Boettcher Concert Hall is one of the largest currently under consideration.
Colorado Governor Bill Ritter also introduced an economic stimulus package in December. The four pieces of legislation would give payroll tax credits to companies that add at least 20 jobs and would improve loan access for expanding businesses. In addition, the legislation would increase worker training and development incentives in the renewable energy sector. Overall, the package would cost $4.9 million not including funds for the job creation incentive.
“With Colorado gaining even more momentum as the fifth-fastest growing state in the nation and a top region for business growth, it’s essential we offer incentives and support for growth and development,” stated Patty Silverstein, chief economist for the Metro Denver EDC.
The region’s reputation won recent attention in a MarketWatch ranking of the best locations for businesses placing Metro Denver third among the nation’s 50 largest metro areas. Criteria for the ranking included population growth, job growth and unemployment, and the number of companies listed among the Fortune 1000, S&P 500, and Russell 2000. Minneapolis-St. Paul and Boston claimed the first- and second-place ranks, respectively.
Colorado and Metro Denver also have other advantages in the current downturn, including a milder-than-average housing correction. The Metro Denver foreclosure indicator, for example, was one of three indicators to move positively both in monthly and annual terms in this report.
Metro Denver foreclosure filings in November fell below the count for the same month in 2007, as was the case for the prior six months. Public trustees reported 1,728 new filings in November, which left total filings through the first 11 months of 2008 down 3.4 percent from filings for the same period in 2007.
The S&P/Case-Shiller Home Price Indices show home prices falling at record annual rates in 14 of 20 U.S. metro areas. The indices show October 2008 home prices declining from the prior year by anywhere from three percent in Dallas to more than 30 percent in San Francisco, Las Vegas, and Phoenix. Local home price conditions are somewhat better, though. The Denver index fell 5.2 percent over-the-year in October and ranked third behind Dallas and Charlotte for smallest annual price decline.
Overall, five indicators moved in a positive monthly direction, compared to one indicator in the prior release. Four indicators moved in a positive annual direction both in this report and the prior two reports.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.