Wells Fargo: Recovery accelerating in Colorado
Robust rebounds in hiring and home prices, especially in the Denver area, reflect accelerating economic recovery in Colorado.
The improvement has been more modest outside the Denver area as farmers and ranchers contend with drought conditions. But the tourism and energy sectors have picked up.
“Colorado’s economy is growing solidly, and both employment and Denver area home prices have recovered to their pre-recession levels. While the strongest gains continue to be in the Denver metropolitan area and region to the north, improvement is evident in many other areas of the state,” according to an economic outlook report prepared by Wells Fargo Securities.
Mark Vitner, a senior economist, and Sara Silverman, an economic analyst, prepared the report.
The Colorado recovery from the Great Recession has outpaced that of the United States, Vitner and Silverman, reported with estimated growth in the state gross domestic product of 2.1 percent in 2012.
The rebound stems in large part to improving economic conditions in the Denver metro area, which accounts for 50 percent of the labor market in Colorado and more than 60 percent of output.
According to the latest estimates from the Colorado Department of Labor and Employment, nonfarm payrolls increased 62,400 between June 2012 and June 2013. With the increase, Colorado payrolls now total 2,368,300, surpassing the previous peak of 2,363,500 reported in May 2008.
According to the Standard & Poor’s and Case-Shiller index, home prices in Denver are up 9.7 percent year-over-year, climbing a half of a percentage point above their prerecession peak.
Outside of Denver, economic growth has been more modest, Vitner and Silverman reported, as drought conditions cut into revenues for farmers and ranchers. Higher commodity prices have helped to buffer losses.
At the same time, though, improvement in other industry sectors benefit outlying areas of Colorado, they said.
The tourism industry continues to grow thanks in part to a extended spring ski season and an improving regional economy that’s bringing more visitors to Colorado.
While low prices continue to curb natural gas production in Colorado, crude oil production has increased sharply. The majority of the increase has come from the Wattenberg Field in the Denver Basin, which is located north of Denver and extends to Greeley. State renewable energy standards have bolstered renewable energy production, including wind power.