Creighton University’s Mountain States Index, which measures the health of the manufacturing industry in Colorado, Utah and Wyoming, soared to a record 77.7 in August, as the Colorado component surged to a record 80.7. Economist Ernie Goss, who compiles the index, said the data were suspect. Optimism declined sharply. The August manufacturing index from the University of Colorado at Denver was not available. The Vectra Small Business Index rose to 92.9 in August, from a revised 90.5 in July.
The economic indicators for Colorado Springs, prepared by economist David Bamberger, improved in July. Five of the indicators improved, while three – single-family permits, taxable sales and foreclosures, worsened.
Denver was the nation’s third most congested city among those with populations of 1-3 million, according to a Texas Transportation Institute Report. Colorado Springs drivers spent 27 hours stuck in traffic in 2005. Nationally, commuters wasted 38 hours per driver and burned 2.9 billion gallons of additional fuel while stuck in traffic.
Job growth in Colorado remained sluggish in August, up 2.0% through the first eight months of 2007. The unemployment rate was unchanged at 3.8%. Both the sized of the labor force and the number of people at work declined in the household survey between July and August.
Hiring plans for the fourth quarter in Colorado Springs is flat, according to Manpower Inc. An equal number of firms – 16% - plan to add and reduce staff. Both construction and government plan to cut jobs.
Colorado ranks second in the nation behind Texas in aerospace jobs, according to the Metro Denver Economic Development Corporation. The state has 26,650 employees in the private aerospace sector, up 12.9% from a year ago.
Income:
Total personal income in Colorado rose 1.4% in the second quarter, above the national gain of 1.2% but well below the first quarter increase of 2.0%. Both inflation and more jobs are factors in the rise.
Seven of the eight Mountain Region states, led by Wyoming with a 14% gain, had the largest compensation increases in the U.S. in 2006. Colorado’s 7.4% increase ranked 12th. Not surprisingly, consumer spending is strong in the state, with retail sales up 8.0% in 2006 and 9.7% through May 2007. Denver and Colorado Springs both had year-to-date gains exceeding 12%.
Over the past five years, Colorado’s compensation rose 21.8%, led by an 81.5% gain in mining, a 61.4% increase in military and a doubling of management salaries. These are total, not per capita increases, so part of the gain is due to increased employment in some sectors. Salaries in the information sector fell 13.7% over the last five years and manufacturing compensation was flat.
Inflation:
Prices in the Denver/Boulder/Greeley metro area rose 2.5% in the first half of 2007, in line with the U.S. increase. Local energy prices fell 0.6%, led by a 12.6% drop in natural gas prices. Shelter costs rose 3.0%.
Tourism:
Of the $8.9 billion contributed to the state’s economy by the tourism industry, 15% came from in-state residents, according to the Colorado Tourism Office. 31% of overnight visitors were Colorado residents. Taxes paid by tourists reduce Coloradans’ taxes by $150 per head, according to the agency.
Pikes Peak Country Attractions, which represents about 30 Colorado Spring area attractions, reported an increase in visitors. The region had 6.3 million visitors in 2006, despite a poor August.
Gaming revenues in August totaled $71.99 million, up 4.7% from August 2006 but down 6% from July. Forty-four casinos, down one from last month and three from a year ago, paid $6.4 million in gaming taxes.
The hotel occupancy rate in August was 74.3%, up from 72.0% a year ago. The average daily room rate increased 7.2% to $121.92. Year-to-date, the occupancy rate averaged 66.1%, up 1.5 percentage points from the first eight months of 2006. Grand Junction had the highest August occupancy rate, 89.9%, while Colorado resorts had the lowest, 60.8%, according to the Rocky Mountain Lodging Report.
Housing:
An index tracking residential developers’ expectations fell to a record low in September, its seventh consecutive decline. Respondents were optimistic, however, that homebuilding will recover in the second half of 2008.
Sales of existing single-family homes in metro Denver rose slightly in August, boosting sales for the first eight months of 2007 up 0.7%. The average and median price rose for the month to $329,783 and $257,500 respectively. Increased sales were in the $500,000 and above price range. Inventories of homes for sale were stable. Condo/townhome sales were down for the month and year-to-date, as were average and median prices. Sales gains were at the high and lower end of the market. Inventories declined.
A different measure of home values, the S&P Case/Shiller Index, which measures same-home sales but includes mortgages above $417,000 excluded in the OFHEO index, reported a 1% drop in Denver home prices in June, the seventh consecutive decline. Both the Case/Shiller and OFHEO indices are a better measure than the Board of Realtors data, since the changing mix of homes sold does not distort data. Home price declines are slowing in metro Denver at the same time they are accelerating in other cities around the U.S.
Data released by the Census Bureau show that Colorado had the eighth largest gain in median home prices, up 183% from $82,400 to $232,900, between 1990 and 2006. Nevada, up 231%, Arizona, up 197% and Idaho, up 183%, are other Mountain Region states in the top ten.
In Colorado Springs, the median home price fell 2.2% to $220,000 in August, the biggest decline since 1996. Sales of existing single-family homes declined 13.3% through August, while sales of multifamily homes dropped 15.4%. The inventory of single-family homes was up 20.3% relative to a year ago, but was down 27.5% for multifamily.
The apartment vacancy rate in Colorado climbed to 8.8% in the second quarter, up from 7.5% three months earlier. An apartment vacancy rate of 5% is generally considered optimal.
Second Quarter Apartment Vacancy Rate
|
|
Colorado Springs |
9.6% |
Denver |
6.2% |
Fort Collins |
9.1% |
Grand Junction |
2.1% |
Greeley |
8.3% |
Pueblo |
8.4% |
COLORADO |
8.8% |
Source: CO Div of Housing.
Vacancy rates in rental homes and condos in metro Denver fell to a six-year low in the second quarter, according to the Colorado Division of Housing. The vacancy rate declined to 4.0% from 4.2% in the first quarter and 7.1% a year ago. The average rental rate increased 1.6% to $946.07.
In Colorado, one household in 312 had foreclosure activity in August, ranking it eighth in the nation. Nationally, foreclosures rose 115.3% relative to a year earlier, and notices of defaults sent were up 50% from July. Foreclosure data remained grim, both nationally and locally. El Paso County reported a 20% increase in foreclosures in August and a 33.1% gain year-to-date. However, analysis by the Colorado Springs Gazette pointed out that there was one foreclosure for every 123 households in the first half of 2007 relative to one for every 28 households in 1988.
Nonresidential:
The value of nonresidential contracts in Colorado declined 4.0% through August, led by declines in manufacturing plants. The manufacturing contract decline was the result of huge contracts for a cement plant and a utility plant in Pueblo in 2006. Education and amusement contracts also fell, while public building and office building contracts rose sharply.
