February 2007
Colorado's competitive business climate receives national praise
Colorado’s competitive business climate received national praise, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for February 2007.
Colorado’s business climate received kudos during the past month from two different studies. Colorado ranked fourth in the 2006 State Competitiveness Report released by Suffolk University’s Beacon Hill Institute, up from sixth in the 2005 study. The Institute defines competitiveness as “the policies and conditions that ensure and sustain a higher level of per capita income and its continued growth” and bases its rankings on eight sub-indexes: government and fiscal policy, security, infrastructure, human resources, technology, business incubation, openness, and environmental policy.
In addition, Colorado's economy ranked among the strongest in the country in the 2007 Development Report Card for the States compiled by the Corporation for Enterprise Development (CFED). The state achieved a position on the national “honor roll,” earning a B for economic performance, an A for business vitality, and an A for development capacity, or positioning for future growth. According to the CFED, Colorado is considered to be a “forward-thinking state with a robust business community and agile labor force.”
Colorado’s competitiveness in 2006 was confirmed by the second edition of Metro Denver EDC’s Toward a More Competitive Colorado report. According to the report, Colorado citizens are remarkably healthy, productive, and innovative, but the state struggles in its human capital investment.
“Colorado has made great strides in improving its competitive advantage both nationally and globally and we are thankful to get recognition,” stated Tom Clark, executive vice president of the Metro Denver EDC. “However, we still have more hurdles to overcome. Our A’s in business vitality and future growth could be affected by legislative action, and we need to focus on investing in our human capital,” Clark continued.
Additional findings from the report state that Colorado ranks first in high tech employment and is the second most highly educated state in percentage of college graduates. Conversely, Colorado ranks 48th in state and local support for higher education, and 48th in higher education spending per full-time student.
Colorado’s positive competitiveness ratings are reflected in a steady demand for office space in the Metro Denver market. This demand led to higher lease rates and lower vacancy rates in 2006. The office market in Metro Denver completed its 11th quarter of positive absorption in the fourth quarter of 2006, according to CB Richard Ellis. Metro Denver ended 2006 with an overall vacancy rate of 13.7%, down from 14.3% in the third quarter of 2006.
Office space was being filled by Metro Denver employees with a total employment increase of 1.8% in 2006 compared to a 1.4% gain at the national level. Moreover, Metro Denver’s unemployment rate for both November and December is at the lowest level in more than five years at 4%. All seven Metro Denver counties reported unemployment rate declines from 2005 to 2006.
The most recent monthly economic data for Metro Denver reveals that nine of the 18 indicators moved in a positive direction for the month, up from seven last month. Annualized activity remained relatively stable with 14 economic variables posting positive changes for the year, the same as last month. As was the case throughout most of 2006, the Metro Denver economy posted positive gains across all economic sectors with the exception of the residential market. The housing market continues to struggle with declining home sales, rising foreclosures, and decreased construction activity.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.