March 2009
Economists hope economic stimulus investments will buoy consumer confidence
With consumer confidence near a historic low, economists hope that investments in jobs, infrastructure, and housing programs through the national stimulus plan will further expand our regional economy, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for March 2009.
President Barack Obama signed the $787 billion economic stimulus bill—the most broad-reaching economic package in decades—in Denver on February 17. The Denver Museum of Nature & Science was selected to highlight the significant investments the new law will make to create jobs in renewable energy research and development. Officials say President Obama chose to sign the package in Colorado because the state is at the forefront of the nation's push toward renewable energy.
Government estimates suggest that stimulus spending in Colorado will create or retain 59,000 jobs over the next two years. Not all analysts agree with this estimate, but state officials are still moving quickly to meet spending deadlines for some stimulus programs. State departments of transportation, for example, must commit at least half of their highway stimulus dollars by early July to avoid losing the funds. Colorado’s expected share of the transportation and other stimulus provisions, which total nearly $3 billion, are estimated as follows:
- $403.9 million for highway projects and $103.5 million for mass transit.
- More than $130 million on low-income weatherization programs and renewable energy research.
- More than $66 million for clean water and drinking water programs.
- Almost $232 million on food stamps, TANF, and other social assistance programs.
- At least $33 million in law enforcement grants.
- More than $60 million for low-income and public housing programs.
- More than $900 million intended for school modernization, special education, and other school needs.
- More than $168 million for extensions of the unemployment insurance program, vocational rehabilitation, and labor-related grants.
"For our economy to improve, consumers must regain their confidence and begin to again invest in the real estate and financial markets," explained Patty Silverstein, president of Development Research Partners and chief economist for the Metro Denver EDC. "We are hopeful that the stimulus package will further encourage consumers and companies to make these vital investments."
While the national housing and retail markets remain volatile, two recent rankings show that the region's housing and retail markets are outperforming many metro areas. A recent report by Forbes magazine ranked Metro Denver the nation’s sixth-best housing market. The ranking is based on factors that measure the overall drop in prices, the deceleration (or acceleration) of home price declines, and the amount of equity lost by homeowners. A study by Madison Marquette shows that Metro Denver is less likely to struggle with “distressed” retail real estate than many other metropolitan areas. The study ranks 63 metro areas based on retail vacancy, the velocity of increases in vacancy, net absorption, the inventory pipeline, and pre-leasing. Metro Denver ranked 22nd among the 63 areas.
Metro Denver foreclosure trends are also improving, and the foreclosure indicator was one of two to move in both a positive monthly and annual direction in this report. Overall, four of 18 economic indicators moved in a positive monthly direction, compared to three indicators in the prior report. Consistent with the prior four reports, four indicators moved in a positive annual direction.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.