by Amy Gillentine
Published: May 7,2009, Colorado Springs Business Journal
Local economic conditions have hit bottom, and economists believe El Paso County has been through the worst of the recession.
“The good news is that the economy is not deteriorating further,” said Fred Crowley, senior economist at the College of Business and Administration at the University of Colorado at Colorado Springs and economist for the Southern Colorado Economic Forum, which publishes a quarterly report about local economic conditions. “Home sales are up, listings have decreased — that means stable home prices. Permits have bottomed out and are up slightly. Consumer confidence is better.”
The latest quarterly report shows the business conditions index has halted its downward trend and improved slightly from February to March. Business conditions have remained steady since November, the report said.
“The most important measure of the area’s economic health might be employment,” the report said. “Since employment tends to lag the business cycle, the forum expects several months of slow economic activity are ahead for the local economy.”
“We got by very nicely this time,” Crowley said. “We didn’t have the tech firms to wear us down, but the down side is that we don’t have them to give high paychecks. The nature of our economy has changed, and we haven’t fared as badly as during the 2001 downturn.”
The current numbers are promising, but Crowley said he expects a “shot in the arm” from arriving troops in the summer.
“Those people and their families are going to buy gas, buy food, buy new televisions,” he said. “That’s going to make a difference this summer.”
Other news from the quarterly report:
- Permits for new single-family housing remains significantly below average, but is flat to slightly higher compared to the fourth quarter of 2008.
- Weakness in townhouse permit activity also is well below average.
- Compared to the last several years, private residential building activity has remained weak. The normal rise from late spring to early summer is present and offers a “glimmer of hope.”
- Multifamily permit activity was up 17.4 percent during 2008. Vacancy rates in the 10 percent range and declining real rents suggest no additional multifamily housing is needed at the current time.
- Single-family home sales were down 28.5 percent from the annual average for 2005-07.
- Home sales are 36 percent below average.
- Home prices are down 5 percent compared to March 2008. Median sale prices declined 4 percent.
- Sales tax collections peaked during 2007 and have declined since. Per capita, sales tax collections fell 17 percent for the city from 1999 to 2008. Additional declines are expected.