There’s good news and bad news with the Colorado Springs economy, according to Dr. Tatiana Bailey, the incoming director of the Southern Colorado Economic Forum, which took place Oct. 10 at the Antlers Hilton.
Bailey and her colleague, UCCS professor Tom Zwirlein, spoke to about 500 persons attending the Forum. After 18 years with Zwirlein as director, this is his final year.
Since 2000, the Colorado Springs area has seen an increase in population by 24.2 percent, and the workforce has increased by 13.5 percent, but employment levels have increased at a “relatively flat” level at 7.1 percent, Bailey said.
“That’s really where the problem is,” she added.
In the United States, immigrants account for 12.9 percent of the population, yet they start 30 percent of all new businesses, she said. Entrepreneurial cities are those which welcome immigrants.
Colorado gained 36,300 new jobs last year and almost 75,000 new jobs this year, but most of the job growth is happening in Denver, Boulder and Fort Collins.
“There’s something more going on.”
– Tom Zwirlein, Ph.D
[/pullquote]Bailey said the southern Colorado region should emphasize its strengths. Business leaders here should focus on the aspects that have been identified as having the most weight in indices of entrepreneurial communities – the availability of talent, local atmosphere, access to capital and institutions, Bailey said.
“There are some commonalities of essential ingredients that enhance the probability that cities can become entrepreneurial or that can foster small business growth,” she said.
In southern Colorado, sports, health and wellness are strengths that could be emphasized when the community seeks to encourage business growth, she said.
The engine of new job growth comes from new firms, she said. Some 99.7 percent of firms with less than 500 employees were responsible for virtually all new jobs in the economy, she said.
Co-working spaces “make sense for a lot of reasons,” Bailey said. A small business at a co-working space pays less rent and utilities. They can share resources like graphic design.
“A lot of times, your more mature entrepreneurs can help the nascent ones,” she said.
A “huge advantage,” of the possibility of business growth in Colorado is its educational attainment. In the U.S., 29 percent of the population attain bachelor’s degree; in Colorado, 37 percent are college graduates.
“We are way ahead of the curve there,” Bailey said.
Consumer confidence has grown from 73 percent last year to the current year figure of 84.6 percent, which is positive for the economy because, “they’ll open up their wallets and spend,” Zwirlein said.
Colorado’s unemployment rate is at 5.1 percent while El Paso County’s registers at 6.9 percent, “moving a little bit slower than the rest of the state,” he said.
A trend that has become the “new normal,” Zwirlein said, is that more people mid-50s and older are staying in the workforce.
The gap between the labor force in El Paso County and the workforce is widening. Part of that can be attributed to Baby Boomers exiting the workforce and Millennials not entering the workforce. Part of the reason also is people are starting their own businesses, and therefore are not included in labor force statistics.
“But I think there’s something more going on, and we should be concerned about that,” Zwirlein said.
Since the year 2000, Colorado Springs lost a significant portion of manufacturing and information technology jobs. Now, health care and social assistance are growth sectors with an additional 12,000 jobs since 2000, he said.
Manufacturing in the United States has become more competitive, Zwirlein said, because the cost of transporting items from overseas has increased and the cost of domestic utilities has decreased.
“Two of the most favorable countries for manufacturing right now are the United States and Mexico. Now we have to figure out how to get a bit of that back in El Paso County and the southern Colorado region,” Zwirlein said.
One job sector that has bounced back is housing, he said, with the county building department listing an estimated 2,900 building permits for single family homes.
Zwirlein predicted around 800 multi-family units being built, but he added, “We’re ahead of that.”
Home sales have been strong in the Pikes Peak region, with around 8,500 sold yearly.
“Now, we’re up to almost 11,000 units,” he said.
Economists estimate interest rates will climb next year, but that shouldn’t cause problems.
“In 1984, we bought our first home here at the bargain basement rate of 11 percent, and we were happy to get it,” Zwirlein said.
“The foreclosure problem is largely behind us,” with around 1,700 this year, which is standard, he said. n CSBJ