March 2007
Market fundamentals remain strong amid expected slower year of economic growth
Market fundamentals are strong amid an anticipated slower year of economic growth in Metro Denver, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for March 2007.
The most recent monthly economic data for Metro Denver reveals that eight of the 18 indicators moved in a positive direction for the month, down from nine last month. Annualized activity slipped somewhat with 12 economic variables posting positive changes for the year, compared to 14 last month. Data from the end of 2006 and beginning of 2007 indicates the employment, consumer, and commercial real estate markets are performing well while the residential real estate market continues to slow overall economic growth in Metro Denver.
“Conditions are falling in line with what we anticipated,” stated Patty Silverstein, chief consulting economist for the Metro Denver EDC. “The market fundamentals are still good, despite 2007 already proving to be a slower-growth year.”
Employment in Metro Denver increased by 6,600 positions from November to December, bringing total employment to 1,396,600 jobs by year end. Total employment increased 1.8% in 2006 compared to a 1.4% gain at the national level. A closer look reveals employment increased 1.9% in the Denver-Aurora MSA and 1.5% in the Boulder-Longmont MSA.
New data from the National Science Foundation reveals that the University of Colorado’s (CU) federal and nonfederal research expenditures were in the top 10% of all ranked U.S. universities in 2006. More specifically, CU was 11th for federally-financed research expenditures among the 630 private and public ranked universities and first for federally-financed research expenditures among the 150 public ranked universities. CU attracted a total of $640.1 million in research awards in 2006.
In addition, the Colorado School of Mines, the University of Colorado at Boulder, Colorado State University, and the National Renewable Energy Lab signed a “Collaboratory” in February aimed at making Colorado the renewable energy capital of the nation. The Collaboratory requested $21 million in federal funds to increase the efficiency of solar cells, but will also receive $2 million in state funds annually for three years.
Colorado ranks 14th in the U.S. for wealth and second for adults with college education. Conversely, the new “State Accountability Report” pegs the state 48th for higher education funding, 37th for pre-K funding, and 31st for college completion rates. However, major advancements are taking place in the seven-county Metro Denver area and the two-county Northern Colorado region through the Metro Denver WIRED (Workforce Innovation in Regional Economic Development) Initiative. The Initiative recently awarded $3.7 million through its JumpStart grant program. The WIRED JumpStart grants will fund existing successful education, entrepreneurial, and workforce development programs in Metro Denver's targeted industries.
In the commercial office sector, Frederick Ross called 2006 a “powerful year” for Metro Denver's office segment as absorption levels reached a seven-year high by year end, vacancy rates decreased, rental rates increased in high-demand areas, sales activity increased, and new construction projects intensified. Ross identifies solid job growth, the completion of Denver’s T-REX Project (including the Southeast light rail system), and investor optimism as the contributing factors of the solid performance. About 1.33 million square feet of office construction is currently underway in Metro Denver among 53 buildings.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.