August 2010
Positive announcements on the local front help fuel Metro Denver’s economic recovery
Local increases in business leader confidence and commercial real estate development announcements add fuel to Metro Denver's economic recovery, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for August 2010.
The most recent University of Colorado Leeds Business Confidence Index suggests Colorado business leaders are increasingly confident about the state's economic outlook, and their optimism about hiring and capital investment brought some much-needed good news to labor markets.
However, weakness in several key indicators nationally has undermined confidence in other states' economic recovery. Slower home sales were expected following the expiration of the homebuyers' tax credits, but the extent of the sluggishness seems to have taken builders, homeowners, and other market players by surprise.
"As the recovery continues, though, it is important to remember that uncertainty and setbacks do not necessarily mean the nation is re-entering recession. These bumps and turns are, unfortunately, part of the recovery process," stated Tom Clark, executive vice president of the Metro Denver EDC.
Second quarter growth in U.S. gross domestic product slowed as anticipated, partly because businesses' inventory restocking is beginning to slow. Weak economic statistics are never encouraging, particularly for the many unemployed workers, small businesses, and budget-burdened governments facing a frustrating road to recovery.
"Metro Denver, on the other hand, had 16 of 18 indicators move in a positive annual direction this month, compared to 15 indicators in last month's report, and only three during this time last year," said Clark.
The average weekly number of unemployment insurance claims filed in Metro Denver declined between May and June. The weekly average count of claims filed through the first six months of the year (2,093) was 21 percent lower than the comparable average for 2009.
Additionally, Metro Denver's office market is continuing to stabilize according to CB Richard Ellis' second quarter MarketView report. Vacancy and lease rates have flattened, and some signs of a rebound - including increased interest by property investors - are beginning to emerge. The report notes, though, that sustained improvements in vacancy and lease rates will depend on stronger job growth and an accompanying increase in demand for space.
Locally, new commercial real estate development is seeing some activity. Denver International Airport officials are working with Spanish architect Santiago Calatrava on the airport's South Terminal Redevelopment Program. The development will link the south end of the airport with a new commuter rail terminal, a plaza, and a 500-room hotel. The proposed plaza will connect rail passengers to the main terminal under a canopy that echoes the airport's signature tent structure, and design plans for a commuter rail bridge over E-470 are also underway. The project is expected to create more than 6,600 jobs.
Spokespeople for dialysis provider DaVita revealed plans for the company's new permanent headquarters in Denver. Company officials finalized a deal for a site near Millennium Bridge at the north end of the 16th Street Mall, and they say a new, $90 million building to be constructed on the site will house several hundred staff plus a training center. DaVita is currently operating from a temporary headquarters on Wewatta Street.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.