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The Front Range Purchasing Management Manufacturing Index improved slightly in December, to 51.7, after dropping to 50 in November.  Production, new orders, prices, lead times and import orders all rose.  The Non-Manufacturing Index declined slightly to 53.1, but still remained in expansion range.  The Creighton University Mountain States Index, covering manufacturing in Colorado, Utah and Wyoming, rose to 65.5 in January, up from 61.2 in December.  The Colorado component soared to 86.9 from 70.0, an all time record.  The Vectra Small Business Index for Colorado increased to 95.6 in January, from 94.3 in December.  A sharply higher unemployment rate contributed to the improvement.

Four of the monthly indicators for the Colorado Springs economy prepared by economist David Bamberger posted gains in December, while four were negative.  The bad news was concentrated in job losses and real estate.  The CU Colorado Springs Business Conditions Index for the county fell in December to its lowest level since March 2003 and August 2007.  Seven of the ten components declined.
Almost 50 million American, 16.2% of the population, moved in 2005, according to Census data; 57%, were under 30.  Colorado ranked 7th in total moves at 19.6%, with 4.2% moving from another state, ranking us 8th in this category.
Per capita gross domestic product in Colorado was $48,487 in 2006, ranking the state in the top quintile.

Per Capita State Gross Domestic Product - 2006

Colorado led the nation in fraud complaints filed with the Federal Trade Commission, with one in every 428 people filing a complaint.  Weld County ranked second among metropolitan areas, with one for every 174 residents. 

Inflation

Inflation slowed in metro Denver in 2007, averaging 2.2% after coming in at 3.6% in 2006.  The U.S. inflation rate for all of 2007 was 2.8%, down from 3.2% last year.  However, between December 2006 and December 2007, prices nationally increased 4.1% and were up 4.3% from January 2007 to January 2008.  The local inflation rate is only calculated twice a year and averaged 1.9% between the second half of 2006 and the second half of 2007.

Employment

Revised employment data for 2006 and 2007, along with preliminary January 2008 data, will be released on March 11.

Job Changes 2007

Adam Aircraft shut down operations in February, after being unable to obtain financing.  The company had eliminated 250 employees in Denver and Pueblo in January.

There were 158,100 advanced technology jobs in Colorado in 2005, according to AeA, a technology trade association.  There was a loss of 1,700 jobs, causing the state to drop from first place to third place in technology concentration at 8.6%.  Colorado had ranked first for the previous nine years.  The average industry wage was $80,200, 193% of the average wage in the state.

Finance

In 2006 payday lenders made 290,000 loans totaling $632 million.  The average payday loan in Colorado is $343, with fees and interest of $544, for an annual average interest rate of over 350%. 

Colorado held $300 million in unclaimed property in fiscal 2006, according to a Denver Post story.  It collected $52.6 million in that year and returned $14.2 million to owners.

Entrepreneurship

Entrepreneurship, defined as the percentage of the population between 20 and 64 who start a business each month, is declining in Colorado, according to a report by the Kaufman Foundation.  Between 1996 and 1998, 0.44% or 44 people per 100,000 adults created a new business each month.  By 2004-06, the rate had fallen to 0.32% and was only 0.28% in 2006.  Nationally, the rate has ranged between 0.27% and 0.32% for the last 11 years and was 0.26% in 2006.

Tourism

Denver is the top U.S. city for active/adventure vacations and people, according to Travel and Leisure magazine, but one of the worst for ethnic food. It ranked second behind Portland, Oregon, for access to the outdoors, and first for active/athletic people. 
Denver International Airport served a record 49.86 million passengers in 2007, up 5.4% or over 2.5 million.  Cargo traffic fell 5.2% or 32.3 million pounds.

Colorado had 5.3 million visitors to its national parks last year, slightly behind neighboring Nevada.  California led the nation with 32.9 million.

Housing

Sales of existing single-family homes in metro Denver fell 11.8% in January and the median price dropped 8.1%.  Inventories were 4.1% above a year ago, but almost even with December 2007.  Condo/townhome sales were off 27.1%, with a 13.5% decline in the median price.  Inventories were down from January 2007, but 18% above December’s level.  In Garfield County, heavily impacted by drilling for natural gas, total home sales for 2007 increased 17% to $1.27 billion.

The metro Denver apartment vacancy rate rose to 6.1% in the fourth quarter, up from 5.3% in the third quarter but down from 7.0% a year ago.  The average rent was $860.36, a 1.2% increase from the fourth quarter of 2006.  The economic vacancy rate, which includes concessions and discounts, dropped to 16.6% from 17.3% in the third quarter and 22.3% a year ago, according to the University of Denver’s Gordon Von Stroh.

Sales of existing homes in El Paso County fell 17.3% in January, as the average sales price declined 8.1%.  The inventory of homes on the market was 12.9% above January 2007.  Condo/townhome sales fell 45.9%, although the average sales price rose 15.0%.  Active listings increased 7.6%, according to the Pikes Peak Association of Realtors.

Doug Carter reported the Colorado Springs apartment vacancy rate rose to 9.4% in the fourth quarter, from 8.5% in the third.  The average rent rose 0.6% over the year, to $695 per unit.

The Downtown Denver Partnership reports that 72 residential projects are under construction/planned that will add 6,710 units to downtown housing.    The 120-block core area generated almost $72 million in property taxes in 2006, 11.9% of the citywide total.

Metro Denver experienced a 27.8% increase in foreclosures in 2007, giving it the nation’s ninth highest foreclosure rate, 2.6%, according to RealtyTrac.  The company reported that six Front Range counties – Adams. Arapahoe, Denver, Weld, Pueblo and Jefferson – had a substantial number of foreclosed loans with negative equity, 29% in Adams County and 25% in Arapahoe County.  Colorado Springs had 1.6% of homes in some state of foreclosure.

Foreclosed homes accounted for 15.6% of all home sales in Colorado, second only to Nevada.  This was up from 10% a year earlier.  Nationally, foreclosure sales were 4.7% of existing home sales, up from 3.3%.

Nonresidential

The value of commercial real estate contracts posted a small gain in January, up 2.6% for the state and 6.9% in metro Denver.  Gains in office, warehouse and higher education facilities offset declines in retail, hospital and amusement activity. 

A study conducted for the National Association of Industrial and Office Properties by the University of Colorado Real Estate Center and the University of Denver Burns School of Real Estate found that the commercial real estate sector accounted for 10.5% of Colorado’s economic activity in 2006.  Almost 70% of this came from maintaining and operating existing properties. 

The office vacancy rate in metro Denver fell to 15.3% in the fourth quarter, down from 15.6% in the third quarter and 17.6% a year ago.  Ross Research reported that the 2.59 million square feet absorbed was the seventh highest in the last 26 years.  Office vacancies soared from 2000-2002.  The Boulder vacancy rate plummeted to 10.4% from 16.1% 12 months ago.

Retail vacancies rose slightly to 6.7% from 6.4% a midyear.  Demand for industrial space was at a seven year high, with the vacancy rate declining to 6.1%.  Industrial warehouse space posted its lowest vacancy rate since 2000, 5.1%, while R&D/Flex space was 12.7% vacant versus 18.1% a year ago.