Political disputes only serve to discourage economic growth in the Pikes Peak region, said economist Tom Binnings, senior partner with Summit Economics.
“I hear this a lot through the business community, prospects through the Regional Business Alliance, that our local political environment is not conducive to community economic development,” Binnings said last week at U.S. Bank’s annual economic forum.
“We have issues with our government that isn’t communicating with one another and acting out through the press, and that becomes a real problem. The outlook is very positive, and in my mind, we need to make sure the positives prevail. The business community needs to continue to put pressure on the public sector to be supportive and collaborative in our efforts.”
Binnings focused his remarks on the Colorado and El Paso County economies.
“What we do or don’t do in the next five years will determine our economy for the next generation,” Binnings said.
“City for Champions is probably the largest incentive package offered by the state of Colorado in its history. We have an opportunity to make some good things happen, a positive for our community,” Binnings said.
Colorado is experiencing an expansion cycle, outperformed by only Texas and Utah, he said. Up until 2006, El Paso County’s economy paralleled the state’s. At the time of the recession, the Pikes Peak region began to deviate and, Binnings said, “We have yet to recover, as the northern part of the state has done phenomenally well. We are reverting back to the national average with respect to job growth.”
A significant portion of the area economy is derived from the Department of Defense, which drives 33 percent of the economy with 62,000 jobs in either active military or businesses that support that sector, he said.
The Business Alliance focus
In working to attract business to this region, the Regional Business Alliance focuses on four sectors of the economy: aerospace and defense; health and wellness; medical technology; and sports.
“We have a regional medical presence” drawing patients from southern Colorado and western Kansas for procedures, Binnings said.
Downtown is seeing positive economic movement with the incubators proposed by Nor’wood Development Group and the O’Neil Group, and new apartment construction, underway and planned.
The transition of Memorial Hospital to University of Colorado Health “has been very positive,” Binnings said. Children’s Hospital is finishing a study to open a northern Colorado Springs branch hospital.
Businesses report problems because of an untrained workforce. There are available jobs, he said, but the workforce lacks the skills. The high demand for skilled workers has led to certificate programs that will train the labor force to fill those jobs.
Between 2010 and 2012, in the aerospace arena, 65 percent of employers report their labor force needs are unmet, and in information technology, that number is 68 percent. In all business sectors in Colorado Springs, 48 percent report unmet labor needs, Binnings said.
Current job openings are classified as sales, professional and scientific, with a shortage of skilled workers for the latter two.
Young people and retirees
Despite rumors to the contrary, El Paso County is seeing an influx of people 20 to 30. Binnings said that from 2010-2012, some 2,000 young people per year migrated into El Paso County. Also, during that time, young people have moved away from Teller County.
“Contrary to some of the discussions going around town that we’re not attracting young people, we are attracting young people, probably largely due to the military,” Binnings said.
“We have a very strong entrepreneurial sector. If you need to be energized, go hang out with some young folks in that sector in Colorado Springs.”
“What we do or don’t do in the next five years will determine our economy for the next generation.”
– Tom Binnings
[/pullquote]Colorado Springs is home to 86,000 veterans, ranking 20th in the nation among 3,200 cities, Binnings said. Of the other 19, all but one were in areas of 1 million people or more.
“We were the only one under 500,000 residents,” Binnings said.
Veterans comprise 19 percent of Colorado Springs’ adult population, and 11 percent of the local employment base are enlisted military.
Small business, airport
Most of the region’s commerce comes from small businesses. Binnings pointed to growth in non-store retailer businesses as Internet use grows.
“A lot of them are quite frankly working out of their homes. They are your neighbors,” Binnings said, adding that in his neighborhood, he sees a UPS truck delivering and taking packages from a nearby home every day.
Eighteen companies have expressed interest in moving or expanding to Colorado Springs because of its airport and the city’s exemption of some business taxes at the airport, Binnings said.
“We typically think of commercial passenger service and the military with our airport, but there’s also general aviation on the western part of the airport,” Binnings said. “The more we can generate revenue outside the passenger terminal, the lower costs we have to recover from airlines, which means the more likely we are to get service to Colorado Springs.”
Most — 85 percent — of businesses in Colorado Springs rated the airport as important to them and to the economy.
“If we’re going to have a big hit — hundreds or thousands of jobs in the coming year, it will probably be at the airport,” Binnings said. “And they’ll be high-paying jobs.”