January 2008
As 2008 begins, the national and local economies are maintaining a slightly more tenuous balance. Job creation has slowed, but Colorado and the metro area labor markets remain tight, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for January 2008.
Metro Denver's November employment figures followed a flattening trend that began earlier last year. Metro Denver added 4,000 jobs in November as seasonal hiring accelerated. Year-to-date job growth for 2007 remained stable at 1.8 percent. Natural resources and construction and manufacturing were the only two of Metro Denver's 11 industry supersectors to report year-to-date job losses (-1.8 percent and -2.4 percent, respectively). Among the remaining industries, year-to-date employment growth ranged from less than one percent in transportation, warehousing, and utilities to 4.2 percent in professional and business services.
Regionally, the Boulder-Longmont MSA continues to lead job growth with employment up 2.6 percent year-to-date. The Denver-Aurora MSA reported 1.6 percent job growth through November, ahead of the nation's 1.3 percent gain but behind Colorado's two percent growth through the first 11 months of 2007.
Colorado's job growth through 2007 was largely driven by gains in natural resources and mining. As the year ended, news from the state's mining sector suggested the growth could continue. Freeport-McMoRan Copper and Gold, Inc. will re-open the Climax molybdenum mine in Leadville. Company officials say daily operations will employ 350 workers when pit-mining resumes in 2010. Additionally, Golden's National Renewable Energy Laboratory (NREL) will hire 100 scientists and administrative staff, thanks to the lab's largest-ever budget increase. NREL also secured funds to build a $55 million new facility on the existing campus.
Metro Denver employers improved their hiring outlook for 2008, although hiring expectations remain noticeably below prior years. According to the most recent Manpower Employment Outlook Survey, 27 percent of Denver area employers planned to hire in first quarter, up from 23 percent in fourth quarter 2007. Denver area job prospects will be best in non-durable goods manufacturing, transportation and utilities, and financial services. Job prospects in Boulder's non-durable goods manufacturing sector also look bright, contrary to a weaker outlook for non-durable manufacturing jobs at the national level.
Unlike its employers, Mountain region consumers are not as confident as they were in the past according to the Conference Board’s Consumer Confidence Index. The region's index followed an inconsistent course in November declining to 113.9 after hitting 140.1 in October, the third-highest reading for the year. The national Consumer Confidence Index posted its fourth consecutive decline in November as consumers' short-term outlooks deteriorated considerably.
A look back to September – the most recent month for which local retail data are available – reveals subtle signs of slowing in Metro Denver's retail market. Retail sales across all industries totaled almost $7.4 billion in September, up about six percent from September 2006. While sales gains are still healthy, over-the-year growth tapered considerably in all but one of the seven Metro Denver counties. Boulder County reported September retail sales up 15 percent over September 2006, but growth in the remaining counties ranged from -0.6 percent in Broomfield County to 4.9 percent in Denver County. Several Metro Denver retailers reported slower-than-expected foot traffic on the typically busy day-after-Christmas.
The slumping residential real estate sector continues to challenge economic growth, but the commercial real estate sector has maintained momentum. Consumers weathered these economic challenges reasonably well, but high food and energy prices could keep pressure on household budgets throughout the year.
"Overall, though, Metro Denver's economy has experienced relatively mild corrections, and the area's reputation as a top spot for work and play will help keep the economy growing this year," stated Tom Clark, executive vice president of the Metro Denver EDC.
Recent economic data for Metro Denver show that eight of 18 indicators moved in a positive direction for the month, up from seven positive changes recorded last month. The mortgage crisis continues to test consumer confidence and the stock market, but commercial real estate trends are stable and hiring expectations have improved. Thirteen of the 18 indicators had positive annual trend changes, up from twelve recorded last month.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.