John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Tom Clark, executive vice president of the Metro Denver Economic Development Corp., borrowed the accounting phrase Last In, First Out, or LIFO, to describe where Colorado stands as far as emerging from the downturn in the economy.
“Because of Colorado’s diverse economy, we expect we’ll be ‘last in, first out’ of the recession,” said Clark, in a mid-year report released online today. The entire report, authored by economist Patty Silverstein of Development Research Partners, is full of national and local data.
Clark says that metro Denver ” is on the radar for international and national company relocations and expansions that could further stabilize our labor market.”
He goes on to say that “While the state’s labor and housing markets have suffered some of the largest downturns in decades, Colorado is still in a comparatively better economic position than many states nationwide. According to a recent forecast by Moody’s Economy.com, Colorado, Idaho, Texas, Oregon, and Washington will be the first states to recover in late 2009. While each state’s economy is unique, the five states have generally better household credit ratings, milder housing downturns, and concentrations of business in energy, technology, and other industries that should benefit from pent-up demand.
Like Colorado’s economy, the metro Denver economy is weathering some of the most difficult labor, housing, and financial market conditions reported in decades. Still, the regional economy has several advantages that should support a stronger and earlier recovery than many metropolitan areas are likely to experience.
First, Metro Denver’s housing market has been more stable than other markets nationwide, the report notes.
Foreclosure rates have improved in the region’s most-affected counties, and the region’s home price declines are consistently smaller than declines reported for other metropolitan areas.
In fact, foreclosures through the first five months of 2009 fell 13.3 percent from the same months in 2008. Notably, the counties which reported the most foreclosures in 2006 and 2007 – Adams County, Arapahoe County, and the City and County of Denver – have reported some of the largest declines in foreclosures so far this year.
Metro Denver commercial real estate markets are also in a better position than markets elsewhere, partly because of sustained business interest and partly because of more restrained development prior to the downturn. These and other factors including a well-educated workforce and high quality of life continue to attract businesses to metro Denver, even during recession.
The Metro Denver economy still has room for improvement, particularly as consumers and businesses remain cautious and governments work through a damaging combination of lower sales, property, and income taxes. Even so, improvements in the Metro Denver economy – particularly in housing – will become more apparent through the second half of 2009, the Metro Economic Development Corp. notes.
