February 2009
Recent rankings highlight Metro Denver’s economic viability in uncertain times
Several recent rankings in job market strength, residential real estate, and livability highlight Metro Denver’s relative stability in a turbulent economy, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for February 2009.
The region’s job market – while under strain – is expected to fare better than many markets in 2009 thanks to a diverse industry base with solid long-term growth prospects in many sectors. These positive factors continue to make Metro Denver an attractive place to live and work, as evidenced by several recent reports on why and where people move.
Denver ranks first among the nation’s most desirable places to live, according to a recent poll by the Pew Research Center. Nearly 2,300 adults were interviewed for the survey, which is part of a broader study on where and why people move. Respondents most frequently mentioned Denver as the city where they would like to live, and Denver consistently ranked among the top 10 when survey results were cross-tabulated by gender, income and education, and political preferences.
Additionally, fifty-four percent of all residential moves in Colorado last year were inbound, according to the 2008 United Van Lines Migration Study. Researchers called Colorado’s inbound-outbound trends “balanced.” Nevada, North Carolina, and Washington, D.C. reported the highest inbound rates in 2008, and Michigan, North Dakota, and New Jersey reported the highest outbound rates.
“We are thankful for the continual influx of people and businesses to the region to help buoy our labor market as well as our residential real estate market,” stated Tom Clark, executive vice president of the Metro Denver EDC.
The quarterly Market Risk Index released by PMI Mortgage Insurance Co. ranked Metro Denver among 10 regions with the least risk of home price declines over the next two years. Specifically, the Denver-Aurora MSA had the 10th-lowest risk of reporting a decline in prices between the third quarters of 2008 and 2010. The index showed a growing risk of home price declines in 369 of 381 metropolitan areas, so Metro Denver is among a small handful of regions with a relatively stable outlook.
Metro Denver job losses between November and December totaled 9,500, nearly half of which were positions lost in the professional and business services supersector. Across all industries, the region’s over-the-year rate of employment change turned negative in December (-0.6 percent), but remained essentially on par with the Colorado change rate (-0.7 percent) and ahead of the national rate (-2 percent). Because local labor markets were much stronger at the beginning of 2008, Metro Denver’s annual average job growth rate reached one percent, compared to a 1.1 percent rate in Colorado and a -0.3 percent rate nationwide.
However, future employment growth is encouraging. The results of the most recent Manpower Employment Outlook Survey suggest that many Metro Denver employers will take a wait-and-see approach to hiring in the first quarter of 2009. In the Denver-Aurora MSA, 15 percent of business respondents claimed they would add jobs in the first quarter, while 12 percent announced plans for layoffs and the remaining majority (70 percent) said they would leave current staff levels unchanged. In the Boulder MSA, 18 percent of respondents indicated plans to hire while 13 percent expected layoffs and 65 percent anticipated no change from current headcount.
Even with a better-than-average outlook, though, Metro Denver’s economy is still absorbing impacts from the national recession. Three of 18 economic indicators in this report moved in a positive monthly direction, compared to five indicators in the previous report. Consistent with the prior three 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.