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Qwest eliminated about 100 information technology jobs in Denver, approximately 10% of its Colorado workforce.  The company cut 600 Colorado jobs in 2006 and 700 in 2005.

On a positive note, Quantum is consolidating several operations in Colorado Springs, adding 70 jobs.  The company laid off 1,300 workers there in 1994 when it moved production to Asia.  The tape drive remained in Colorado Springs, growing to 1,700 employees, but 1,300 lost their jobs in 2000-01 when the work was moved to Asia.

Construction has begun on a casino and resort on the Southern Ute Indian reservation.  When completed, it will employ 400-600 workers.  In addition, several hundred construction workers will be employed over the next two years.       

Yuma, an agricultural community in eastern Colorado, is benefiting from the renewable energy boom, according to a story in the Denver Post.  A 50-million gallon ethanol plant is under construction, with a peak construction workforce of 180 and a permanent staff of 40.  A 100-million plant is scheduled to break ground this year, with peak construction employment of up to 500 and 60 permanent employees.  There are also plans for a fertilizer manufacturer, a wind farm and a cellulosic ethanol demonstration plant.

Inflation: 

The Denver-Boulder Consumer Price Index (CPI-U) rose 3.6% in 2006, ahead of the U.S. rate of 3.2%.  The 3.4% increase in the second half of the year was almost a percentage point faster than the national increase.  Apparel was reported to be up 24.2% relative to 0.5% for the nation, which seems unlikely.  Medical costs increased at double the national rate and non-durable good inflation was five times the national rate.  Food inflation was lower, however, and energy inflation was negative..  Core inflation, which excludes food and energy prices, was 4.9% in the second half of the year, almost twice the national rate.  The cost of shelter, the largest component of the index, rose 5.6% in metro Denver relative to 4.0% nationally.

The cost of living index, a different statistic that measures relative costs among 274 cities ranged from 87.9% of the national average in Pueblo to 103.4% in Denver.  Colorado Springs had the fourth lowest home energy costs in the survey.

4^th Quarter 2006 Cost of Living Index

	2006:4
Colorado Springs	95.4
Denver	103.4
Ft. Collins	103.3
Grand Junction	103.3
Greeley	95.0
Pueblo	87.9

Wealth: 

Colorado ranks as the 14^th wealthiest state according to a story in the Denver Post.  Despite that, it is 37^th in school funding for K-12 and 48^th in funding of higher education.  It ranks 25^th in high school graduation rates.  Fortune magazine reported in March that Colorado has 89,896 millionaire households and ranks 11^th in median household income.  Arizona is the only Mountain Region state with more millionaires, 105,722, but is only 28^th in median household income.

A survey in August identified 16,203 homeless people in Colorado, half of them holding jobs.  This was the first statewide homeless census since 1988, which identified 3,637 homeless.  Not all homeless live on the street; some were in pay-by-the-week motels, for example.

Tourism:

The hotel occupancy rate for Colorado averaged 56.8% in January, up from 55.7% a year ago.  The average daily room rate was up 12% to $135.14, according to the Rocky Mountain Lodging Report.  The opening of the new Hyatt Regency added 1,100 rooms to the downtown Denver market last year, but the Denver Metro Visitor and Convention Bureau reported that hotel rooms booked for meetings increased 19.3% to 517,373.  Nine additional hotels with over 1,500 rooms are in various sages of construction or planning.

Colorado Springs reported its lowest occupancy rate in a decade, 40.8%.  The increase in the average room rate was the largest in a decade, $$7.17 or 10%.  The state’s highest hotel occupancy rates were in the resorts 72.1% overall and 85.5% in Aspen.

Denver International Airport was the nation’s fifth busiest airport in 2006 and the world’s tenth busiest.  Despite blizzards that closed the airport for two days in December, passenger traffic rose 9.1% to 47.3 million passengers, an all time record.  Only Beijing and Jakarta had larger percentage increases.  In Colorado Springs, annual traffic declined 1.3% for the year, then fell another 3.8% in January. 

Despite a slowing economy and declining inflation, the National Restaurant Association forecasts a 6.4% increase in Colorado restaurant sales in 2007.  This will rank Colorado as the state with the sixth fastest growth rate.  The president of the Colorado Restaurant Associated said this does not include price increases that will result from the pending minimum wage increase.

Revenues at Colorado casinos declined 7,9% in January relative to a year ago, due in part to snowy weather.  Casinos paid $9.5 million in gaming taxes on $58.8 million in adjusted gross proceeds.

Housing: 

Housing permits in Colorado declined 32.9% in January, a combination of a 45.1% drop in single-family permits and a 44.3% increase in multifamily permits.  In metro Denver, single-family permits fell 49.3% but multifamily permits more than doubled.  The Rocky Mountain News reported that this was the lowest level since 1992 for permits for single-family homes in metro Denver.  The Downtown Denver Partnership estimated that 2,070 housing units were added in the downtown area, as 16% increase.

Nationally, home construction was at its lowest level in a decade and permits fell for the 11^th month out of the past 12.  The National Association of Home Builders reported that builders was cutting sales prices, down in 51% of the market surveyed, and offering other incentives.  Analysts estimate that the weakening housing industry cut economic growth by a full percentage point in the second half of 2006.

Sales of existing single-family homes rose 21.9% in metro Denver in January, as the average price dropped 3.1% and the median price declined 2.5%.  The inventory of homes on the market was 3.3% higher than in January 2006.  Multifamily sales increased 33.3%, but the average price plunged 11.4%.  The median price was unchanged.  Inventories decreased 8.8%, according to the Denver Board of Realtors. 

Single-family home sales in Colorado Springs fell 5.9% through February, according to the Pikes Peak Association of Realtors.  Existing home sales were down 6.0%, with a 2.0% gain in the average sales price.  Condo/townhome sales rose 13.7%, with a 6.4% rise in existing unit sales and a 13.7% average price gain.  For the month, inventories of existing homes were up 28.4% and of condos were up 38.9%.

The Genesis Group reported that new homes sales in metro Denver in 2006 declined 20.7%, to 8,286.  This includes the 25% of homes put under contract that didn’t close, often because prospective buyers were unable to sell their existing home.  Multifamily sales accounted for 40% of the total, the highest percentage in 20 years.  Nationally, new homes sales suffered their worst monthly decline in 13 years in January, down 16.6% from December. 

The Office of Federal Housing Enterprise Oversight reported that home prices rose in 90.8% of the 282 cities surveyed in the fourth quarter.  Twenty-one of the 26 cities with negative appreciation rates were in California.  Three Mountain Region states – Utah (17.6%), Wyoming (14.3%) and Idaho (14.0%) had the most rapid price appreciation in the country, while Nevada (-.2%) saw prices decline.  The index attempts to measure price changes in comparable homes rather than the average price of all homes, which is affected by the type of home sold.  Colorado ranked 43^rd in price appreciation for the year, up 3.32%.  Prices in the fourth quarter were 0.87% higher than in the third quarter.  Since 1980, Colorado home prices have appreciated 269.06%, below the U.S. average of 307.51%.

   Source:  OFHEO.

Homes entering foreclosure in Colorado increased 31% in 2006, according to the Colorado Division of Housing.  Adams and Weld counties were particularly hard hit.  Over 48% of these ended up in public trustee sale, more than double the national average; a third were withdrawn and 12% were cured.

Foreclosures in El Paso County, which in 2006 were at their highest level since 1989, increased almost 40% through February.  The Public Trustee’s Office reports a foreclosure only when a lender begins a legal action. 

The composite apartment vacancy rate for Colorado, compiled by Gordon von Stroh, increased to 7.7% in the fourth quarter, above the equilibrium rate of 5.0%.  Rents declined 1.5% to $824.54.  Grand Junction has the state’s lowest vacancy rate, 2.7%.

Apartment Vacancy Rates

	Vacancy Rate	Average Rent	Affordable VR
Colorado Springs	12.6%	$691.24	7.4%
Denver	7.0%	$849.89	5.2%
Ft. Collins	9.35	$752.45	5.6%
Grand Junction	2.7%	$572.75	2.2%
Greeley	7.2%	$624.78	2.5%
Pueblo	7.5%	$478.91	2.2%
COLORADO	7.7%	$812.42	5.2%

  Source:  CO Div of Housing.

Non-residential: 

The value of nonresidential construction contracts increased 44.2% in January.  There were big increases in retail, hospital and amusement activity.  Data for one month are based on too small a base to be a reliable indicator.

Frederick Ross reported a 69% increase in office absorption in metro Denver and a three percentage point decline in the vacancy rate to 17.1%.  Absorption in the Central Business District was the highest in 20 years.  Five major office projects have been announced; the Downtown Denver Partnership describes them as the highest caliber in 20 years.