May 2011
Metro Denver labor market shows signs of improvement
The long-awaited turnaround in the region’s labor market is underway. Metro Denver’s net job gain between February and March was consistent with seasonal trends, and such a return to normalcy is encouraging, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for May 2011.
In fact, financial resource website MoneyRates.com recently ranked Colorado ninth among the "10 Best States for Making a Living." Contributors calculated each state’s adjusted average income, or average income weighted by cost of living, tax burden, and job availability to compile the rankings. Total Metro Denver employment across all industries in the first quarter was 0.8 percent higher than employment in the first quarter of 2010. In percentage terms, Metro Denver employment in the first quarter rose the most from last year’s level in education and health services (+3.2 percent), professional and business services (+2.6 percent), and leisure and hospitality (+2.4 percent).
Data also suggest hiring concerns are abating. A Mountain States Employers Council survey shows 42 percent of Colorado employers plan to fill job vacancies this year, and just three percent plan layoffs. Hiring should help continue the decline in new claims for unemployment insurance and will ultimately reduce unemployment rates. Labor market experts say unemployment in Metro Denver and Colorado could remain above-average for a time as more people begin or resume looking for work, but local unemployment rates are nonetheless stabilizing, if not declining.
"The fact that our employers are feeling confident to add workers is crucial to our long-term recovery," explained Tom Clark, executive vice president of the Metro Denver EDC. "We are operating in a new economic reality. Steady, sustained job growth will be the new norm."
The Grubb & Ellis first quarter Office Trends report for Metro Denver suggests the region’s office market is steadily improving. The report notes an uptick in activity among small and mid-sized tenants and says job growth, while gradual, indicates investors have also returned to Metro Denver’s office market and have purchase some properties, including 1800 Larimer, at impressive prices.
Complementing labor and commercial real estate trends, the University of Colorado Boulder’s Leeds Business Confidence Index rose to 56.8 for the second quarter from 48.6 in the first quarter. The second quarter reading was the highest reported since mid-2006, and the index component gauging hiring plans showed the largest positive movement from the prior quarter. The overall index shows local businesses are clearly optimistic about growth over the next three months, analysts say.
The unemployment rate and new unemployment insurance claims in Metro Denver are two indicators among 12 that moved in a positive monthly direction in this report, while fifteen indicators moved in a positive annual direction. The indicators trended the same way--12 in a positive monthly direction and 15 in a positive annual direction--in the previous 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.