November 2010

Metro Denver's cleantech sector proves to be bright spot amid national recovery

While "doom and gloom" messages seem to dominate the national headlines, more positive economic signs are emerging in Metro Denver, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for November 2010.

As it did last year, Colorado ranked fourth in Forbes' "Best States for Business" list. The annual list ranks states on 33 criteria in six categories: costs, economic climate, quality of life, labor supply, growth prospects, and regulatory environment. Colorado achieved top-10 rankings in four of the six categories and scored highest for labor supply (first), economic climate (sixth), and growth prospects (sixth).

Colorado ranked second in the Beacon Hill Institute's annual State Competitiveness Report. The report classified states using 43 indicators in eight categories: human resources, openness, environmental policy, infrastructure, technology, security, business incubation, and government and fiscal policy. Colorado earned top-10 rankings for technology (third), business incubation (fourth), and infrastructure (fifth). North Dakota ranked as the nation's most competitive state, followed by Colorado, Massachusetts, Wyoming, and Minnesota.

"These rankings bode well for business growth in the region, especially as our cleantech industry continues to expand," stated Tom Clark, executive vice president of the Metro Denver EDC.

Several large orders are bringing work to Vestas America's Colorado plants. Officials with Vestas Wind Systems recently dedicated the company's new wind tower manufacturing plant in Pueblo, and spokespeople say the facility is the largest of its kind in the world. The 432,000-square-foot Vestas Towers America plant currently employs 400 workers.

A report released by the nonprofit Solar Foundation states Colorado has the nation's sixth-largest number of workers in jobs related to solar power. Researchers assembled the report by surveying solar power employers to determine their current staff levels and near-term hiring expectations. The report affirms that Colorado solar power companies employ roughly 5,300 workers and predicts that total nationwide solar employment will increase by more than 20 percent over the next year.

Albuquerque-based solar power company SkyFuel, Inc. a leading supplier of utility-scale concentrating solar power (CSP) systems, announced in October 2010 that it would move its corporate headquarters to Unincorporated Jefferson County in west Metro Denver. The company will consolidate the headquarters with an existing research and development center in the area.

Officials with SMA America LLC say they have hired roughly 200 workers at the company's plant northeast of Denver, and they plan to add 500 more jobs by the end of next year. The company manufactures residential- and utility-scale solar inverters, which convert energy from solar panels into energy usable on the power grid. SMA America is the North American branch of the German company SMA Solar Technology AG, which is the largest solar inverter manufacturer in the world.

Additionally, spokespeople for New York-based Solar Energy Systems LLC say the company has opened an office in the Denver Tech Center. The company focuses on design and installation of commercial solar energy systems.

"With these recent company announcements, it's not surprising Clean Edge, Inc. ranked Metro Denver as the nation's fifth-most active cleantech job center," said Clark.

In the Clean Tech Job Trends 2010 report, Clean Edge contributors combined weighted measures of metro area cleantech job postings, patents, and investment activity - all areas in which Colorado excels.

Overall, 11 economic indicators for Metro Denver moved in a positive monthly direction in this report. Twelve indicators moved positively in the previous report. Fifteen indicators moved in a positive annual direction in both this report and in the prior month's report.

The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends. Key highlights include:

Labor and Employment

• Total employment in Metro Denver increased by 4,500 jobs between August and September - consistent with the increase typically reported at this time of year. The gain occurred largely because jobs added in the state and local government sector - specifically, seasonal jobs in public education employment - offset losses in leisure and hospitality, construction, manufacturing, and financial services.
• September unemployment rates for Metro Denver (7.9 percent) and Colorado (8 percent) were both unchanged from August levels. In fact, both rates have been relatively flat over the past several months. The flat trend - while certainly better than a rising rate - suggests job growth is occurring fast enough only to keep up with growth in the labor force.
• The average weekly number of initial unemployment insurance claims filed in Metro Denver continues to decline. September's weekly average was 22.4 percent lower than the September 2009 average, and the weekly average for the first nine months of the year was almost 20 percent below the average for the same months in 2009.

Consumer Sector

• Retail sales in Metro Denver were still rising in late summer, but the over-the-year growth rate slowed in July. The July sales total was 5.8 percent above last year’s level, while sales in the previous months exceeded levels last year by eight percent or more.
• The September average hotel occupancy rate throughout Metro Denver (71.9 percent) was more than five percentage points above last year’s level, but the average room rate was slightly below the September 2009 average. The hotel market is price-sensitive even as occupancy rates continue to improve.
  Total passenger traffic at Denver International Airport in August was one percent higher than traffic reported in August 2009.
• The NASDAQ was up 10.5 percent year-to-date in October, followed by the Dow Jones Industrial Average (+6.6 percent) and the S&P 500 (+6.1 percent). The Bloomberg Colorado index was up a significantly larger 30.3 percent year-to-date in October partly because natural resource-related stocks performed well.  

Residential Real Estate

• A decline in Metro Denver closed home sales in August-to-September was largely consistent with seasonal trends. The September sales total was 23.1 percent lower than the previous year’s total partly because fall 2009 sales were inflated by the tax credit-driven sales push and partly because fall 2010 sales from the post-tax credit sales bust.
• Metro Denver public trustees filed 11 percent fewer foreclosures in September than they did one year prior. Filings during the first three quarters of the year were down from the same period in 2009 by the greatest margins in the City and County of Denver (-20.1 percent) and Adams County (-16.7 percent).
• Metro Denver builders pulled more permits for apartment units in September than they did through all 12 months of 2009. Metro Denver permits issued for all types of housing was up 57.8 percent year-to-date in September.