Colo. economy mired, lags most of the West

Author:

Aldo Svaldi

Denver Post Business Writer

Edition: THU

Section: BUSINESS

Page: C-01

Colorado remains mired in an economic slump months after the official end to the U.S. recession.

Things are stable or looking up in the Western U.S. with the exception of Oregon and Colorado, according to Economy.com, an online provider of economic analysis in West Chester, Pa.

"It is fair to say that Colorado is still in recession," said David Givens, an economist with Economy.com. "You would have to see two or three successive quarters of job growth before you could say the state has rebounded."

Other states in the region have flat economies while Wyoming, New Mexico, Nevada and Hawaii are enjoying growth.

The U.S. recession that started in March 2001 was over by that November, according to the National Bureau of Economic Research. Growth has been sluggish at best since then, but the national economy hasn't lapsed back into recession.

Because a state equivalent of gross domestic product isn't available on a timely basis, Economy.com relies on employment growth to measure economic health.

Comparing second quarter of 2003 to the second quarter of 2002, the total number of jobs available in Colorado is off about 0.6 percent, or 14,000 positions, said Givens, citing Bureau of Labor Statistics numbers.

However, the state did manage to add about 9,600 jobs between the first and second quarters of this year, in part because of a pick-up in tourism.

Viewed in light of the 47,000 jobs lost in the fourth quarter of 2001, job losses have moderated.

Still, barring a robust recovery in the second half of the year, Colorado is on track to lose jobs two years in a row, something unseen since the Great Depression, said Tucker Hart Adams, a regional economist with U.S. Bank.

"My guess is that we are bouncing along the bottom," Adams said of the state economy.

For Joseph Galvan, general manager of the Woodfield Suites off Interstate 25 and Arapahoe Road, bouncing along the bottom has meant having to explain to higher-ups why Denver is lagging other cities in filling rooms, a task he will travel to Chicago next week to do.

"We are not doing as well as our hotels in other markets," he said.

Woodfield Suites, which caters to business travelers, spent $2 million renovating its Greenwood Village property last year, expecting occupancy rates would rise with a recovery, Galvan said.

The recovery remains a no-show, but Galvan said he remains confident a payback for the investment will come in 2004, a view Givens supports. "We are on the cusp of what we believe is a strong recovery in the national economy," Givens said. "That should feed through to Colorado and should halt the job losses."

Crucial to Colorado's recovery is a rebound in business spending on technology and equipment, Givens said. Manufacturing remains one area where the state continues to lose jobs.

State residents should pay close attention to what corporations claim they will invest in new equipment when they report their earnings.

There is a danger, however, that a national recovery could harm the state if Colorado doesn't keep pace.

People would leave a stagnant Colorado for better job opportunities, Adams said, and that would put the housing market at risk.

Colorado needs job growth of 2 percent to 2.5 percent to provide enough jobs for people entering the workforce in the state and to start attracting outsiders to move here, she said.

Givens predicts Colorado could see job growth humming along at 3.5 percent by the fourth quarter of 2004.

Caption:

GRAPHIC: The Denver Post