2004 - colorado department of education

BUSINESS ECONOMIC OUTLOOK

2004

T H I R T Y - N I N T H A N N U A L

Sponsored by the University of Colorado at Boulder,

Leeds School of Business, and KeyBank

BUSINESS ECONOMIC OUTLOOK

2004

T H I R T Y - N I N T H A N N U A L

Price per copy: $50.00

Additional copies may be ordered from:

Business Research Division

University of Colorado at Boulder

420 UCB

Boulder, CO 80309-0420

303-492-8227

ISBN 0-89478-204-5

Copyright 2003 by the

Business Research Division

Leeds School of Business



Material contained within the accompanying tables is in the public domain and, with

appropriate credit, may be reproduced without permission. Please reference,

“Business Research Division, Leeds School of Business, University of Colorado at Boulder.”

Printed on recycled paper.

Preface .................................................................................................................................................................. 2

Colorado Then and Now............................................................................................................................................ 4

United States and Colorado Economic Outlook...................................................................................................... 6

Population, Labor Force, and Personal Income .................................................................................... 10

Agriculture................................................................................................................................................ 13

Natural Resources and Mining................................................................................................................ 15

Construction ............................................................................................................................................ 19

Manufacturing.......................................................................................................................................... 22

Trade, Transportation, and Utilities........................................................................................................ 28

Information .............................................................................................................................................. 35

Financial Activities .................................................................................................................................. 42

Professional and Business Services, and Other Services........................................................................ 48

Educational and Health Services ............................................................................................................ 53

Leisure and Hospitality............................................................................................................................ 58

Government.............................................................................................................................................. 64

International Trade .................................................................................................................................. 67

Summary .................................................................................................................................................. 73

From Around the State: La Plata County .............................................................................................. 75

From Around the State: Mesa County .................................................................................................. 76

From Around the State: Northern Colorado ........................................................................................ 77

From Around the State: Pueblo County................................................................................................ 78

From Around the State: Southern Colorado ........................................................................................ 79

Steering Committee Members .................................................................................................................................. 81

Estimating Groups ...................................................................................................................................................... 82

Business Research Division ........................................................................................................................................ 86

University of Colorado at Boulder: Services to Business and Industry ................................................................ 88

Table of Contents

2004 Colorado Business Economic Outlook

2

The annual Colorado Business EconomicOutlook focuses attention on the changing

structure of the Colorado economy, both past andpresent, and projects employment and major eco-nomic indicators for the coming year. With rele-vant, understandable information concerningColorado’s future, we hope to assist in the advance-ment of sound economic development decisionsby policymakers throughout the state. In addition,we strive to give businesses more informationabout the economic reality of the environment inwhich they operate.

The information presented at the Thirty-NinthAnnual Outlook Forum in Denver and the otherforecast presentations throughout the state isreported with greater detail in this publication. Itpresents as complete and knowledgeable a forecastof the 2004 Colorado economy as is possible givenour publishing deadline.

We are extremely pleased to have concerned andcommitted individuals from Colorado business,education, and government organizations through-out the state join and work with us for severalmonths, estimating and projecting the data seriespresented in this statistical summary, as well asproviding significant portions of the narrative. The

efforts of these individuals aregreatly appreciated. A complete listof the contributors appears at theback of this book. If you have ques-tions about the economic sectors orstate regions, we encourage you tocontact these individuals.

I would especially like to acknowl-edge the support and hard work of the LeedsSchool of Business and University of Colorado atBoulder personnel in the preparation, presenta-tion, and promotion of this project. My sincerestthanks go to Gary Horvath, Marketing Analyst;Cindy DiPersio, Publications Coordinator; TerryRosson, Program Assistant; Lynn Reed, GraphicDesigner; Julie Arnett, Research Assistant; BrendanHickey, Erin Hickey, and Spencer Thompson,Student Research Assistants; Lori Call, Director ofCommunications; and Greg Swenson, Staff Writerwith the Office of News Services, for their help inassembling and presenting the 2004 BusinessEconomic Outlook Forum.

IntroductionThe University of Colorado atBoulder Leeds School of Businessis pleased to present our annualforecast of Colorado’s economy.Our program analyzes changesthat took place this past year andprojects activity for 2004.

Work on the forecast began in July, when datacollection and statistical updates were performed.Committees were formed in September with morethan 80 leaders in business, education, and govern-ment, as well as economists and specialists, agreeingto participate. Members were split into 13 groups,each group representing a major economic sector.

Beginning with this forecast, the economic sectorsreflect the new North American IndustryClassification System (NAICS), adopted in January2001. The system is more relevant to the moderneconomy, and will allow the United States todirectly compare its economic data with that ofother NAFTA members, Canada and Mexico.

Forecasts for each sector were prepared by extrapo-lating historical trends and then modifying theresults with

Preface

1) Information from extensive survey work con-ducted with key Colorado business and industryleaders;

2) The expert knowledge and judgment of com-mittee members; and

3) Known or expected economic changes affectingcertain industrial sectors within the state.

The unique nature of the Business EconomicOutlook forecast is its combined approach of usingdetailed statistics with extensive survey researchand expert opinion. We believe this methodologyprovides additional qualitative insight particularlyrelevant to the short-term forecasting process.

Richard L. Wobbekind, Ph.D.Associate Dean of External Relations and DirectorBusiness Research DivisionLeeds School of BusinessUniversity of Colorado at Boulder

3


A Return to Optimism

For the first time in several years,there seems to be a glimmer of

light at the end of the tunnel—andsome promising economic news forthe United States and for Colorado.In what we all hope is the beginningof a sustained economic trend, itwas announced several weeks agothat the U.S. gross domestic product grew by 7.2%in the third quarter. Better still is what we see hap-pening in this region. The business community hasseemingly weathered the worst of the cycle, andevidence suggests that some industries are gettinghealthy once again.

Whether we’re at the peak or the bottom of thecycle, though, KeyBank has been and continues tobe strongly committed to this community, and toserving the total financial needs of Colorado. We’refocused on being more valuable to our clients andto this community by offering better ideas andfinancial solutions that are meaningful and rele-vant in today’s economic environment.

With that as a backdrop, it is KeyBank’s privilegeonce again this year to partner with the Universityof Colorado’s Leeds School of Business to sponsorthis annual event. This is the third year of our part-nership, and I cannot think of a better organization

to team with in order to provideyou with the latest in-depth knowl-edge and investment research.

Today, we will hear about currenteconomic trends, and what theexperts anticipate for the comingyear. How will an election yearnext year affect the economy? How

can this region leverage its role as a major distribu-tion hub to uncover future growth opportunities?And finally, will sectors such as technology, tele-communications, and tourism bounce back, or arethere new, emerging sectors that will lead this areaback to economic prosperity?

On behalf of KeyBank, I would like to thank youfor your continued commitment to this importantprogram, and for supporting the 2004 installmentof the Leeds School of Business annual economicforecast.

Michael B. HobbsExecutive Vice PresidentKeyBank Commercial Banking

4

Colorado Then and Now

In 1950, the population of the United States was about151 million, and approximately 1.3 million people

resided in Colorado. Since then the U.S. population hasalmost doubled, while the population of the state hasincreased about 31⁄2 times. The United States has experi-enced wars in Asia, the Cold War, and now the war onterrorism, along with periods of relative peace. The statehas endured floods and droughts and economic boomsand busts, and basked in the glory of two professionalfootball and hockey world championships.

Although state and national employment data areavailable back to 1939, the adjacent timeline provides a glimpse of the social, economic, educational, andpolitical changes that have occurred since 1950. Theselandmarks have laid the foundation for events that willimpact our economy in the years ahead. Colorado eventsare listed on the top half of the page, with the U.S. eventslisted on the lower half. The percentage change inemployment for the past 50 years is shown in thebackground.

The employment downturn in 2003 marks only the sixth time since 1939 (when records were first kept) thatColorado has shown negative job growth. During thisperiod the U.S. has shown negative job growth on 11occasions. This is the first time that Colorado hasrecorded negative job growth in consecutive years andonly the second time that the U.S. has shown negative job growth in consecutive years.

This timeline emphasizes the importance of learningfrom the past. A historical perspective of past events canhelp businesses make more effective decisions today andin the future. ✜


5


CONSUMER PRICE INDEX, U.S. AND DENVER/BOULDER/GREELEY

(1982-1984=100)


66

Output

From 1992 to 2000 the United States enjoyedstrong growth in gross domestic product

(GDP). The strongest growth occurred between1996 and 2000, when the annual rate of growth inreal GDP varied between 3.6 and 4.4%. The econ-omy moved into recession in 2001, with threeperiods of negative growth. The fourth quartergrew at a modest rate of 2.7%, with the annual ratefor the year ending at 0.3%.

A shallow recession is often followed by a shallowrecovery. That axiom appears to be holding true forthe 2001 downturn. After showing a strong spurt ofgrowth in the first quarter of 2002, growth taperedoff to a more modest level, and real GDP growthfor 2002 was 2.4%. The following year started off asmore of the same; however, the recent third quartersurge has raised forecast expectations to 2.7% orhigher for annual growth in 2003.

The GDP deflator registered 1.6% annual growthin 2003 as deflation has become more of a concernthan inflation. The accelerated rate of growth thatoccurred in the third quarter of 2003 cannot bemaintained as several reasons behind that surgewere more short term in nature. Nonetheless, themonetary and fiscal stimulus has worked, and theeconomy will grow at a rate closer to potential inthe year ahead. The annualized year-over-year realGDP for 2004 will grow at a rate of 4.2%, with aGDP deflator of 1.2%.

United States and Colorado Economic Outlook

ConsumptionDespite the weak employment picture, the con-sumer has continued to be the cornerstone of theU.S. economy. Consumers have responded posi-tively to low interest financing programs providedby domestic automobile manufacturers, allowingthat segment of retail sales to record slower but stillsignificant sales in 2003. In addition, many home-owners have taken advantage of low interest ratesto either refinance their homes or take out homeequity loans. This has provided them with addi-tional equity or lower monthly payments, both ofwhich have supported additional consumption.These resources may also have allowed workerswho have been laid off to maintain prior purchas-ing patterns. The Bush tax cuts of 2003 have alsogiven a significant boost to consumption, particu-larly in the third quarter when rebate checks weremailed to many American families with children.

Looking ahead to 2004, it is likely that consump-tion will continue at a modest, but slightly acceler-ated rate of growth more consistent with arecovering economy. This will be driven primarilyby an increase in personal disposable income, butwill also be fueled by rising consumer optimismand the rising wealth effect of a modestly appreci-ating stock market. Nationally, retail sales areexpected to show a slight increase in 2004. A keycomponent of retail sales, light truck and autosales, will support an increase in sales after threeconsecutive years of decline. Still, sales will notsurge in this segment of the recovery as they havein the past. Many of the typical “recovery” autosales have occurred during the 0% financing in

2002 and 2003 and were, in effect, borrowed fromthe future (2004 and 2005). This will be one damp-ening factor on the recovery.

After reaching a high of 144.7 in May 2000, theConference Board’s Consumer Confidence Surveydeclined to 80.7 by year-end 2002. The index hasslowly rebounded to 88.0 by year-end 2003. As theeconomy improves in 2004, national consumerconfidence is expected to also increase, to 95.0.


7

While there is no state indicator of consumer con-fidence, the Conference Board measures consumerconfidence for the Mountain States. Prior to 1991the Mountain index for consumer confidence wasconsistently lower than the U.S. index. In 1991 thistrend reversed itself, and consumer confidence inthe Mountain States has remained higher than inthe United States overall. On occasion, theMountain index was up to 30 points higher thanthe U.S. index during the mid-1990s, but as thedecade ended the difference dropped to a range of5 to 10 points. During the recent downturn the dif-ference between the two indexes has become muchsmaller. Although Rocky Mountain consumer con-fidence has recently surged, the year-end index forthe Mountain States is expected to be only 100.0for 2003 and 110.0 for 2004.

InvestmentAnother component to growth is investment.During both 2001 and 2002, companies showed a decrease in business investments of more than5.0% each year. This negative trend has reverseditself in 2003 as companies found that they couldno longer postpone certain business expenditures.Year-end investment should rise by 2.0%, modestby the standards set in the late 1990s, but positiveafter the aforementioned two years of decline. Aswe go forward, continued replacement investment,augmented by an increased demand for expansion-ary investment, will drive growth in this area.Business investments are expected to expand by a more robust 9.2% in 2004.

In part as a result of this increase in investment,industrial production will rise by 4.3% in 2004after experiencing a meager 0.1% gain this year.Business inventories will also grow from less than

$1 billion in 2003 to $43.7 billion in 2004. The fail-ure of businesses to expand their inventories in2003 was one of the major reasons that the macro-economic recovery was slow. Currently, inventory-to-sales ratios are at their lowest levels in history,which indicates they will need to be replenished inshort order. As orders pick up, firms will be morelikely to invest in inventory to make certain theycan fulfill demand for their product. However, it isnot clear that we will return to historic inventory-to-sales ratios even during a more robust recovery.Much of the investment in “just-in-time” produc-tion and other cost-saving devices will likely changethe long-term inventory-to-sales ratio relationship.

In 2004, housing starts are expected to decline as mortgage rates continue their slow rise from

40-year lows reached in July 2003. Still, the housingmarket is expected to be better than it was in the1999-2001 period. This optimism is fueled byincreased employment levels and continued goodmortgage rates. (Mortgage rates remain at 20-yearlows at the time of this writing, November 2003.)In Colorado, the number of housing starts will notbe as strong as at the national level, although webelieve that permits will move slightly back into thepositive range. Much of the new construction inColorado will continue to be in lower priced homes.

No appreciable improvement is anticipated in theU.S. international trade position until internationaleconomic conditions improve. Although the dollar

GROSS DOMESTIC PRODUCT AND NATIONAL UNEMPLOYMENT RATE1994-2004

continued on page 8

NATIONAL ECONOMIC INDICATORS1999-2004


8

United States and Colorado Economic Outlookcontinued from page 7

has weakened against some currencies, the fixedexchange rate of the Chinese yuan has reducedopportunities for the United States to rapidlyadjust the trade deficit. Our forecast does notindicate a narrowing of this gap until early 2005.Worldwide economic recovery and a weaker dol-lar are needed for this to happen. The strength ofthe global marketplace is especially important toexport-dependent sectors such as agriculture,international tourism, and manufacturing.

PricesAt present, deflation is more of a concern thaninflation. Nationally, the CPI is expected toincrease by 2.3% in 2003 and 1.5% in 2004.Although housing prices and energy costs havedecreased over the past year, the CPI-U growthrate for Colorado continues to be higher than therate for United States, at 2.9% for 2003 and 2.5%for 2004.

Producer prices, as measured by the ProducerPrice Index (PPI), increased by a rate of 3.1% in2003, led by higher crude and intermediate pricesand a higher level of price control at the wholesalelevel. The PPI is expected to increase only 0.4% in2004 as abundant suppliers keep pricing in check.

Employment costs grew at a 3.6% rate in 2003and are forecast to rise by 3.4% in 2004. Theseincreases are modest and reflect the slow wageappreciation of an economy in the earlier stagesof recovery. However, this slow appreciation inwages is being offset by increasing benefit andmedical costs.


9

Employment and PopulationNational unemployment increased from 4.8% in2001 to 5.8% in 2002 and 6.1% in 2003. We fore-cast a slight decline, to 5.9%, in 2004 as overalllabor conditions and hiring improve. More robusthiring plans will be partially offset by some of theworkers reentering the workforce. This increase inlabor force participation, while welcomed, willkeep the unemployment number high.

As 2004 begins, job creation at the national level isexpected to be broad based, with most sectorsexperiencing growth. Throughout the year, the

service-producing subsectors are expected to growmore rapidly, while the goods-producing sectorsare expected to lag.

The Colorado economy depends on the nationaland global economy for its growth. Unemploymentin the state is expected to again remain below thatof the United States, coming in at a rate of 5.7% in2003 and dropping to 5.6% in 2004.

Nationally, population is expected to show growthof 1.1% in 2003 and 1.0% in 2004, while the growthof the state is expected to slow to 1.2% in 2003 andincrease slightly, to 1.3%, in 2004. The biggest

factor in the slowing of the state’s growth rate fromthe rates of the 1990s has been the significantdecrease in net migration. While net migration issubstantially lower than the 1990s, it is still positiveand has helped to stabilize housing market pricesin an extremely weak employment environment.

In the sections that follow, a summary of 2003 anda forecast for 2004 is presented. These sections pro-vide insight into the key factors influencing each ofthese sectors. We trust this data and analysis willprove useful in your business and policy decision-making process. ✜

CHANGES IN COLORADO NONAGRICULTURAL WAGE AND SALARY EMPLOYMENT(In Thousands)


10

Population, Labor Force, andPersonal Income

The performance of the Colorado economy isdirectly related to the composition of its pop-

ulation, labor force, and the personal income of itswork force. Data from the U.S. Census show thatthe population of the state will increase by about900,000 from 1994 to 2004. Over that periodalmost 62.0% of the state’s population growth willbe attributed to net migration, with the remainderattributed to natural increase. Net migration isexpected to drop from 36,700 in 2002 to 16,500 in2003 and increase slightly to 18,800 in 2004. As aresult, Colorado’s population is expected to grow by58,200 persons in 2004, to 4.63 million. This rate ofpopulation increase will rise slightly to 1.3%, stillabove the national average.

The rapid rate of population growth, in particularthe net migration, caused the labor force to grow ata compound annual growth rate (CAGR) of 2.5%between 1994 and 2002. Reduced net migrationwill result in a labor force that will increase by only1.4% in both 2003 and 2004.

For the first time since 1939, when the Bureau ofLabor Statistics first began tracking employmentdata, Colorado employment showed negative jobgrowth for two consecutive years, in 2002 and2003. This was only the second time that theUnited States has shown negative job growth inback-to-back years during this period.

During the 1990s, the Colorado economy relied ontelecommunications, manufacturing, construction,and tourism to drive growth. Increased employment

COMPONENTS OF COLORADO RESIDENT POPULATION1994-2004

(In Thousands)

ESTIMATED RESIDENT POPULATION, COLORADO AND UNITED STATES1994-2004

(Base Year: 1994=100)

continued on page 12


11

COLORADO RESIDENT LABOR FORCE1994-2004

(In Thousands)

COLORADO NONAGRICULTURAL WAGE AND SALARY EMPLOYMENT1994-2004

(In Thousands)


12

Population, Labor Force, and Personal Incomecontinued from page 10

in these areas fostered strong growth in retail sales,business services, and local government. In 2004 allsupersectors of the state economy are expected toshow improvement over 2003; however, not all sec-tors will add jobs. Strong growth will be seen inprofessional and business services, leisure and hos-pitality (tourism), health care, and retail trade. In2004 Colorado will return to positive job growth,showing an increase of 32,300 jobs, or a 1.5% gain.

In 2002 the state’s level of unemployment jumpedabove the natural rate of unemployment, 4.5 to5.0%, for the first time since 1993. The unemploy-ment rate increased to average 5.7%, where it isexpected to remain for 2003. Despite an increase inemployment of 32,300 jobs, Colorado unemploy-ment will not drop significantly as labor force par-ticipation rates are likely to increase. Unemploy-ment is expected to be 5.6% in 2004.

Between 1994 and 2002, Colorado personal incomegrew at a rate at least one percentage point abovethe national rate. In 2003 and 2004, the rate ofgrowth for Colorado will be lower. The nation’srate of increase in 2003 total personal income willbe approximately 3.3%, followed by 4.1% in 2004.Growth in 2003 total Colorado personal incomewill be 2.8% in 2003 and 4.0% in 2004.

Between 1994 and 2000, Colorado per capita per-sonal income increased at a CAGR of 6.2%, com-pared to the national CAGR of 4.9%. Since then,per capita income in Colorado has grown at a ratewell below the national rate. After showing negativegrowth in 2002, Colorado per capita income isexpected to increase 1.3% in 2003 and 2.5% in2004. This growth will continue to be lower thanthe national rates of growth, which will be 2.4% in2003 and 3.2% in 2004.

This decrease at the state level illustrates the impor-tance of jobs in finance, manufacturing, utilities,communications, wholesale trade, and technology,and the fact that the recent downturn affected agreater number of white-collar workers. It alsoillustrates the importance of dividend income andcapital gains, which disappeared with the downturnof the equity markets in 2001. These results furtherhighlight the differences between the national andstate economies. In retrospect, our higher wagestructured industries appear to have been moresensitive to the recent national recession. ✜

TOTAL PERSONAL AND PER CAPITA INCOME, COLORADO AND UNITED STATES1994-2004

(Base Year: 1994=100)

Agriculture2004 Colorado Business Economic Outlook

13

If 2002 will long be remembered as the year ofthe drought, 2003 will be remembered as the

year cattle prices rose to levels never before experi-enced. Although many of these same factors are inplace for 2004, it is unlikely that we can maintainthe record prices posted in late 2003. Still, 2004should be another good year for cattle prices.Crops in general will show a modest increase in2004, assuming that precipitation is normal andreservoirs are again filled to allow for irrigation.

In 2003, four important factors simultaneouslyimpacted the cattle industry. First, fewer cattle atlower weights (due to the cattle cycle) and thedrought significantly reduced the amount of beefgoing to market. Second, bovine spongiformencephalopathy, or mad cow disease, was discov-ered in Canada, stopping all beef and cattle ship-ments into the United States and further reducingdomestic supplies. The third factor is that Canadawas unable to export their beef to other countries,which opened up additional markets to U.S. sup-pliers. The final contributing factor is that con-sumer demand for beef, fueled by interest in lowcarbohydrate diets, continued the rebound thatbegan a few years ago.

As we look to 2004, many of these factors are stillin place. It is likely, however, that as protocols areestablished for Canadian cattle and beef to againenter the United States, the pressure on domesticsupplies will ease (i.e., Canada supplies about 9.0%of the beef and cattle in the United States). Canada’sreentry into other international markets will alsoaffect U.S. exports. It is expected that beef will faceincreased competition from poultry and other

protein sources, cutting into the demand for beef.The result of these changes will be that the averageprice for fed cattle will likely drop 5.0 to 6.0%, toaround $84 per hundredweight (cwt.). By historicalstandards this is still a very strong price and shouldkeep feeders profitable at least into early 2004.Feeder cattle prices are very high, however, andfeeding margins will be tight. The cattle cycle willcontinue to produce fewer cattle, so total Coloradofed cattle marketed in 2004 will be down to 2.2million, the lowest level in many years.

Because numbers of cattle remain low, most cow-calf operations should be profitable in 2004.Average calf prices are forecast to be about$1.05/lb., a record price. The one discouraging noteis that due to the drought a number of cattlemen

liquidated their herds and missed out on perhapsthe best cattle market of their lifetime. It will alsobe difficult for many of these producers to restocktheir herds at this time because the cost of breedingstock has increased significantly. Overall, due tofewer fed cattle and slightly lower fed cattle prices,total cash receipts from cattle will be down about10.0% in 2004, to $2.55 billion.

The dairy industry has experienced extremely poorprices this past year. Low milk prices have resultedin some dairies being forced out of business due tofinancial stress. Herd numbers in Colorado coulddrop as much as 10.0%. Moreover, average milkprices in 2004 should increase to the range of $13to $14/cwt., a gain of 20.0%. Total dairy products

COLORADO CASH RECEIPTS FROM FARMING AND RANCHING1996-2004

(In Millions of Dollars)



14

rest of the state did in 2003. It is expected thatacreage and prices will be down slightly in 2004 forcrop marketings of around $140 million. Green-house and nursery sales remain an important partof the state’s agricultural picture and will see salesincrease slightly, to $220 million, this coming year.

The state’s sugar beet industry was down signifi-cantly in 2003 due to concerns over adequate irri-gation water. With the Greeley plant closing, beetswere only processed in Fort Morgan. Unless waterissues are resolved along the South Platte, thiscould be repeated again in 2004. Total cash receiptsfor beets are expected to come in at around $25million. Fruit production on the Western Slope isbeginning to change, with peaches surpassingapples as the largest cash contributor. Wine grapesand cherries are also seeing some increases in pro-duction. Total cash receipts from fruit will againcome in at approximately $20 million.

Overall cash receipts from crops are expected tototal slightly more than $1.4 billion. Governmentpayments to farmers will be up slightly next year, toaround $225 million, due to higher crop deficiencypayments. In 2004 the effect of inflation willincrease total farm production expenses about2.0%, to $4.7 billion, but this increase will be offsetby fewer cattle being fed. This will put Coloradonet farm income for 2004 at $833 million. ✜

sold will account for about $235 million, makingdairy our second largest livestock sector after cattle.Hogs will be a close third, with $230 million inreceipts. Although hog numbers are declining bothnationally and in Colorado, prices should improveby 7.0 to 8.0% in 2004.

Because of lower fed weights and fewer imports,lamb sales have been very strong, with a large jumpin price this past year. Marketings, however, areexpected to drop in 2004, and the price will be offby about 8.0%. This will bring cash receipts toaround $100 million. Poultry sales will be upslightly in 2004 due to a strong market for turkeys,resulting in cash receipts of $110 million.Unfortunately, alternative livestock in Colorado are

not doing well. Chronic wasting disease has beendevastating to the state’s elk producers, and buffaloprices have slumped to the point that there is littleprofitability left in this industry. These alternativelivestock industries will see sales slip by some 8.0%.

Colorado remains a strong livestock state due pri-marily to the size of our cattle industry. Althoughtotal livestock sales will be down about 8.0%, to$3.265 billion, in 2004, the state’s cattle industryshould remain strong. It will account for nearly55.0% of all agricultural cash receipts in the state.

Corn will top all crops, with $290 million in cashreceipts in 2004. Although 2003 will be the largestU.S. corn crop on record, improving exports andan expanding ethanol industry will keep prices

next year at around$2.35/bushel. Wheat pricesshould remain fairly con-stant in 2004, at $3.25/bushel, and with a normalharvest (80 million bushels),wheat will account forabout $245 million in cashreceipts. Hay, Colorado’sother major crop, will seeprices decrease slightly, toaround $85/ton, for totalcash receipts of some $205million. Potato acreage inthe San Luis Valley hasdeclined somewhat due todrought conditions. Thisarea did not receive the pre-cipitation that much of the

Agriculturecontinued from page 13

COLORADO FARM INCOME AND PRODUCTION EXPENSES1996-2004



15

Natural Resources and Mining

This NAICS sector includes: Forestry and logging; oiland gas extraction, mining; and support activities formining.

LoggingThe logging industry has historically been anextremely small part of the Colorado economy,employing between 100 and 200 people. The recentwildfires have raised a number of issues relating tothe management of our forests; however, this is notexpected to impact employment in this sector in2003 and 2004.

Oil, Gas, and Carbon DioxideThe Colorado Oil and Gas ConservationCommission (COGCC) estimates the value of theoil, gas, and carbon dioxide produced in Coloradoin 2002 at $2.00 billion, 45.0% less than the pro-duction value of 2001. About 78.0% of this total isfrom conventional natural gas and coalbedmethane (CBM), 17.0% from oil, and 5.0% fromcarbon dioxide. Estimated production volumes in2003 will total approximately 875 billion cubic feetof gas (including CBM), 19.2 million barrels of oil,and 294 billion cubic feet of carbon dioxide.

Gas prices were stable in 2002, with an averageprice of $2.42 per thousand cubic feet. Oil pricesaveraged $23.52 per barrel in 2002. The basis dif-ferential between the average Colorado gas priceand the Henry Hub price increased from an averageof minus $0.77 per million British thermal units(Btu) in 2001 to minus $0.97 per million Btu in2002, reflecting the oversupply problem for RockyMountain producers in 2001 and 2002 (pipelinecompanies report gas volumes as million Btu).

PHYSICAL OUTPUT OF FOSSIL FUELS: COAL AND CRUDE OIL1994-2004

(Base Year: 1994=100)


PHYSICAL OUTPUT OF FOSSIL FUELS: NATURAL GAS AND CARBON DIOXIDE1994-2004

(Base Year: 1994=100)


16

Natural Resources and Miningcontinued from page 15

COGCC estimates that the production value of oil,gas, and carbon dioxide will surpass $3 billion in2003—a 50.0% increase from 2002. Natural gasshould account for about 83.0% of this value.Average natural gas prices are forecasted to be$4.33 per million Btu in 2003—an 89.0% increaseover the 2002 average of $2.29 per million Btu—with the basis differential increasing to $1.27 permillion Btu. Daily average oil production is pre-dicted to remain flat, at 19.2 million barrels, butthe average oil price will rise to $28.80 per barrel in2003—an increase of 22.0% from the average 2002price of $23.52.

The Energy Information Administration (EIA)predicts an increase in oil and natural gas demand(and prices) in the United States for 2003 and 2004as the economy begins to recover, with a projected2.9% growth rate. This expansion is expected toresult in a 3.7% increase in natural gas demand in2003 and a continued rise in 2004. Natural gas pro-duction is expected to increase by only 1.2% in2003. The Rocky Mountain region is expected torespond to this supply deficit by increasing naturalgas production from existing fields and expandinginto new areas. The expansion of the Kern Riverpipeline, which will take an additional 900 millioncubic feet per day out of the Rocky Mountain mar-ket, has dramatically reduced the basis differentialfor gas. As a result, COGCC forecasts an averagenatural gas price in Colorado of $4.61 per thou-sand cubic feet for 2003-2004, the highest averagesince 2000-2001.

EIA reports that crude oil prices have been risingbecause of instability in the Middle East, lowinventories, continued cold weather, and a slowrecovery in Venezuelan exports. World oil pricesare expected to remain near $30 per barrel throughthe winter of 2003-2004, declining to about $27 perbarrel by late 2004.

The petroleum industry in Colorado, particularlythe natural gas segment, may be poised for anotherboom. High natural gas prices and soaring oil andgas revenues are expected to drive a resurgence innatural gas-directed activity in 2003-2004 follow-ing the downturn in 2002. Employment shouldincrease in response to higher prices and the addedpipeline capacity for delivery of natural gas tomore markets. Natural gas production is forecastedto total 875 billion cubic feet in 2003 and 950 bil-lion cubic feet in 2004. This is expected to result inan employment level for the oil and gas subsectorof 8,000 in 2003 and 8,800 in 2004. Generally,employment in this subsector is directly correlatedto energy prices. The implication for the consumeris that all energy prices will be relatively high.Gasoline is likely to be in the range of $1.50 to$2.00 per gallon in 2004. This level of gasolineprice may have a negative impact on tourism andagriculture in Colorado.

The Independent Petroleum Association ofMountain States has identified four interrelatedissues that are now challenging competitiveness inColorado and the Rocky Mountain region:

1) Financial Constraints—Drilling wells and build-ing new pipelines requires capital (cash flow andcredit).

2) Price Volatility—Uncertainty over future pricesresults in cautious investing. The cyclical natureof gas prices makes timing critical.

3) Infrastructure Deficiencies—To compete withother regions, new pipelines must be built in theRockies.

4) Regulatory Uncertainty—Delays limit a com-pany’s ability to respond to supply and demandimbalances.

CoalColorado’s coal industry set new records for pro-duction and efficiency in 2002. In that year, thestate’s 12 coal mines produced a record 35.2 mil-lion short tons of coal. This is the first time that the35-million-tons mark was surpassed, and is morethan double the coal produced in 1989. Most of theproduced coal (97.0%) is sold as steam coal forelectrical generating plants. More than half of thecoal is exported to markets in Kentucky, Indiana,Tennessee, and Mississippi. Coal sales set a recordhigh in 2002, and are only 4.0% lower throughOctober 2003. The Colorado Geological Surveyestimates that coal production for 2003 will beabout 34 million short tons.

The petroleum industry in Colorado,particularly the natural gas segment, may be poised for another boom.

Coal industry employment has also increased inrecent years. According to the Colorado Depart-ment of Labor, 1,853 coal miners were employed asof December 2002, a 3.0% increase over the previ-ous year. These miners work and live primarily inrural parts of northwest Colorado. The coal minesprovide good, stable employment to areas that mayotherwise have low employment opportunities.More than 2,400 people are currently employed inthe industry. According to a 2002 survey of coalproducers by the Colorado Mining Association, theaverage miner earns more than $80,000 annually inpay and benefits. Coal miners are the highest paidindustrial workers in Colorado and have the fourthhighest average salary for mining states.

Twelve mines currently operate in nine WesternSlope counties. The three highest coal producingcounties last year were Gunnison, Routt, andMoffat. Seven underground and five surface minessupply coal via truck and rail to power plants inColorado, Utah, and the Midwest. Oxbow Miningclosed its Sanborn Creek Mine in February 2003after opening the new adjacent Elk Creek Mine. ElkCreek will provide safer mining conditions as thecoal is only 750 feet deep, much shallower than the2,400-foot depth reached in the Sanborn CreekMine. This mine had substantial methane gas androck burst conditions.

Colorado ranks eighth in coal production nation-ally. Of the top 10 coal producing states, onlyColorado and Wyoming had increases in coal pro-duction over the previous year. This remarkableoutput in regional coal production reflects thedemand for clean western coal. Power plants in theMidwest use low-sulfur and low-mercury westernU.S. coal to blend with their higher sulfur coal in


17

order to comply with air quality requirements.Approximately 82.0% of the electric generationoutput in Colorado is supplied by coal, giving thecitizens of Colorado the third lowest electricityrates in the nation.

According to EIA data, the average mine price forColorado coal dropped from $24.65/ton in 1985 to$17.72/ton in 2002. Prices fell during the first quar-ter of 2002 and are in the $16 to $18/ton range asof October 2003. The estimated value of Coloradocoal produced in 2002 was more than $600 million.

In the future, Colorado coal production willdepend highly on environmental regulations. Coalproduction could be constrained by national regu-latory and legislative action, including mandatorygreenhouse gas emission standards for coal-firedpower plants and regional haze regulations. Thedemand for Colorado coal is projected to fluctuatebetween 29 and 40 million short tons annuallythrough 2014. Hill & Associates, a managementconsulting firm, forecasts the demand for Coloradocoal could drop as low as 25 million tons by 2014under current air quality regulations if all powerplants attain compliance. The demand forColorado coal could fall to as low as 11 milliontons annually if stringent carbon dioxide emissionsare adopted. Under current regulations, prices areexpected to decline to the $12/ton range (2002constant dollars) by 2014 as more power plantsdevelop air pollution controls.

Nonfuel MineralsNonfuel mineral production includes metals,industrial minerals, and construction aggregates.Nonfuel mineral production and employment isforecast to remain stable in Colorado in 2004.Colorado will continue to be an important U.S.producer of molybdenum, gold, soda ash, sodiumbicarbonate, construction aggregate, gypsum, andcement. In 2002 (the most recent annual data avail-able), the U.S. Geological Survey estimated a totalvalue of nonfuel mineral production in Coloradoof $614 million. This was a gain of 6.4% over the2001 production value. The production value ofnonfuel minerals is expected to be substantiallyhigher in 2003 and 2004, due principally toincreases in the prices of gold and molybdenum.

According to U.S. Department of Labor’s Bureau of Labor Statistics, annual employment in themetal mining industry in 2002 was 1,141 workers.Nonmetallic, nonfuel mineral mining employed2,101 people in 2002. The Colorado GeologicalSurvey estimates 3,500 employees in the nonfuelmining subsector for 2003 and 2004.

Gold prices increased significantly in 2003 com-pared to the depressed prices during the previousfour years. As of early October 2003, the spot goldprice was around $380 per ounce, while the averagegold price in 2002 was $310 per ounce. This is goodnews for Colorado’s only operating gold mine, theCripple Creek & Victor Mine (CC&V) in TellerCounty. This world-class mine employs about 300people and produced 224,000 ounces of gold in2002. In late 2002, CC&V completed its two-year,$168.5 million expansion and capital improvementprogram. With the expanded production capacity,

According to EIA data, the average mineprice for Colorado coal dropped from$24.65/ton in 1985 to $17.72/ton in 2002.



18

the mine is expected to produce 300,000 to 400,000ounces of gold per year in 2003 and beyond. Thecurrent reserve base is sufficient to support goldproduction until 2012 at the expanded produc-tion rate.

Denver-based Newmont is the world’s largest goldmining company. Although it does not have anyactive mining operations in Colorado, the companyemploys several hundred people. Several smallermining and mineral exploration companies alsoare headquartered in the Denver area and provideemployment for geologists, mining and metallurgi-cal engineers, and financial specialists.

The Henderson Mine in Clear Creek County con-tinues to be North America’s largest primary pro-ducer of molybdenum. The underground mine isowned by Climax Molybdenum Company, a sub-sidiary of Phelps Dodge Corp., and employsapproximately 300 people. In 2002, the mine pro-duced 20.5 million pounds of molybdenum metal,an increase of 9.0% over the 18.8 million poundsproduced in 2001. Molybdenum prices have risensignificantly in the past two years. As of October2003, the price for molybdic oxide was more than$6.00 per pound compared to an average price of$3.75 per pound in 2002 and $2.36 per pound in2001. The Henderson Mine hopes to increase pro-duction by 5.0% over the next year and an addi-tional 5.0% the following year, according to a Julyarticle in the Clear Creek Courant.

The continued sluggish economy has resulted in aslower pace of residential and commercial con-struction in 2003, which, in turn, has led to a

decline in demand for and production of construc-tion aggregates (sand, gravel, and crushed stone).This trend is expected to stabilize or reverse in 2004as the overall economy improves. In 2002 (themost recent year for production statistics), aggre-gate mines in Colorado produced approximately62.5 million tons of construction material, for atotal estimated value of $319 million.

Several other important nonfuel mineral com-modities are produced in Colorado. Soda ash andsodium bicarbonate continue to be produced bysolution mining techniques in Rio Blanco County,

northwest of Parachute. Solvay America, Inc. pur-chased American Soda LLP from Williams inSeptember 2003 for an undisclosed price. CentexConstruction Product’s American Gypsum opera-tion produces gypsum from its mine in EagleCounty. The gypsum is manufactured into wall-board and other products at the plant in EagleCounty. Holcim (US), Inc. operates a large port-land cement manufacturing plant near Florence,Colorado. It recently upgraded the plant to a pro-duction capacity of 1.9 million tons per year. GCCRio Grande, Inc. has been planning and permittinga major new cement plant near Pueblo during thepast several years. The $200 million plant isprojected to produce 1 million tons of cement per year. When operational, the plant and mine is expected to directly employ approximately 100 people.

EmploymentEmployment in the logging industry is expected toremain flat in 2003 and 2004. There will be between150 and 200 jobs in this area.

Employment in the Mining Sector falls into threecategories. About 32.0% of the employees work inthe area of oil and gas extraction, approximately38.0% are employed in mining, and around 30.0%are in support activities. Employment in this sectoris expected to increase by 800 jobs in both 2003 and 2004.

Employment in the Natural Resources and MiningSupersector is expected to total 13,900 employeesin 2003 and 14,700 employees in 2004. ✜

COLORADO NATURAL RESOURCES AND MINING EMPLOYMENT

1994-2004(In Thousands)

Natural Resources and Miningcontinued from page 17


19

This NAICS sector includes: Construction of build-ings, heavy and civil engineering construction, andspecialty trade contractors.

The effects of the slowing Colorado economycaught up with the Construction Supersector

a year ago. The decline broke a string of positivegrowth rates—many of which were double-digitincreases—that dominated the 1990s and contin-ued through 2001. Layoffs actually accelerated inthe second half of 2003. The annual averageemployment for the year is expected to drop 5.2%from the prior year, to 151,900 workers. Stability inmajor building sectors during 2004 will be offset byincreased competition for contracts, particularly inthe first half of the year. A net employment declineof 3.1% from 2003 is forecast for 2004, for anannual average of 147,200 workers.

Single-Family HousingNew single-family activity has been declining in2003 throughout Colorado, with single-familyresidential permits down 10.6% from 2002. Thedecrease has been broadly based, with the sharpestslides in the Front Range counties from metroDenver north to the Wyoming border. An exceptionto these downswings is the Grand Junction area,which has seen an increase in both single-familyand multifamily permits. In El Paso County a90.0% decline in multifamily permits overwhelmedstable single-family permits to give ColoradoSprings the largest decline—26.0%—in totalpermits for any of the state’s metropolitan areas.

Construction

Low mortgage interest rates, which reached 40-yearrecord lows for several months, helped moderatethe decrease in permit activity throughout 2003.This allowed continued “borrowing from thefuture” as declining mortgage interest rates havemade home ownership affordable to first-timebuyers who would otherwise be apartment renters.

In 2004 little carryover of demand is anticipated,but new single-family home sales and constructionactivity will begin to improve. The stability willcome from a recovering economy, modest employ-ment growth, and more people arriving from out

of state. The Federal Reserve will keep interest ratesstable during an election year. A modest 5.4%increase in single-family detached permits is fore-cast for 2004, bringing the total number of permitsto 33,000 units. For perspective, this level of activityis 12.0% below the average number of single-familypermits from 1998 through 2001, but 6.0% higherthan the average for 1996 and 1997. The biggesteffect on the value of new housing costs will be that the baby-boom generation is still buying larger units.

EMPLOYMENT IN CONSTRUCTION, COLORADO AND UNITED STATES1994-2004

(In Thousands)(Base Year: 1994=100)



20

Constructioncontinued from page 19

Vacancies in office building throughout the FrontRange have stabilized in 2003. Construction ofnew space totaled only 185,000 square feet. Thecorporate and speculative market will likely haveexcess capacity until approximately 2008. The paceof construction in the industrial and retail sectorswill remain slow in 2004. Even a rapid recovery inthe high-tech and telecommunications industrieswould not absorb unused offices quickly, especiallyin northwest metropolitan Denver where vacancyrates declined further in 2003, to 29.5%.

Voters considered requests by school boards for$900 million in new K-12 bond issues; historically,we have seen about two-thirds of these requestspass. These moneys are not likely to be expendeduntil 2005, but a large percentage of bond issuesapproved in 2002 will continue to make this sub-sector one of the robust spots in 2004. The remain-der of government construction is mixed. The newDenver convention center hotel is on a fast scheduleand will contribute to next year’s volume, but stategovernment will be forced to restrain spending. Nosignificant capital development is expected duringthis forecast horizon.

Nonbuilding ConstructionThis segment of the construction market is drivenby large projects, such as those sponsored by theColorado Department of Transportation (CDOT),the T-REX project, water and pipeline projects, andmunicipal public works.

In 2003 the sector experienced a small decline asgovernmental budgets have remained weak andmargins on jobs bid in the public arena have

Multifamily HousingThere was a surge in production of multifamilyunits until 2003, when the economy weakened andlow interest rates made home ownership affordableto many renters. These factors combined to batterapartment and rental markets. Vacancy rates are up,rent concessions are widespread, average rents aredropping in some areas, and new product is beingabsorbed at the expense of old. The softest marketsare along the Front Range, but even the historicallytight mountain areas have not been immune.

The proportion of attached, for-sale units in totalmultifamily production continues to increase.Although this sector has benefited from low mort-gage interest rates, the low rates have been a two-edged sword. Many first-time home buyers, whotypically would be looking for an affordableattached home, have been able to qualify for ahigher priced, single-family home, pulling someattached home sellers’ best clients out of this mar-ket. As of fall 2003, the number of condominiumslisted for sale in the Denver area totaled 7,000units, a number that may dampen builders’ enthu-siasm in the short run.

After a recent construction peak of more than18,500 new units in 2001, multifamily productionwas scaled back to fewer than 13,000 units in 2002.This cutback accelerated in 2003, and we expect thetotal for this year to fall to 6,700 units. Although theDenver metro area experienced a major correctionin 2003, it still accounts for the lion’s share of multi-family construction in the state. Much of the re-mainder of Colorado has seen multifamily

production come to a virtual halt. Multifamilystarts in the nonmetropolitan areas of the state(including resort counties) will not likely exceed500 units for the year.

Another decline in multifamily starts in 2004seems unavoidable. A recovery in the apartmentmarket appears to be three to four years away inmajor Front Range markets, leaving the attachedhome sales market shouldering the burden for themultifamily sector in the next few years. Look for adrop to 5,000 multifamily permits in 2004, withmost of these intended for sale.

Nonresidential BuildingThe value of construction during 2003 in the com-mercial, retail, and institutional building subsectorswill drop 3.0% from its 2002 total. The weakness inthis sector will continue into 2004, with only asmall 4.0% gain. A larger increase from 2003 mightbe realized if nonresidential construction continuesto follow new housing starts and if the fourplanned +$100 million prisons are started in 2004in southern Colorado.

Medical buildings will again be the major exceptionto the downturn in nonresidential building. Thissector has historically accounted for less than 10.0%of nonresidential building, but it has grown to agreater proportion of that total. A surge of this typeof work will start in 2004 as the new Children’sHospital and the next phase of higher educationdevelopment at Fitzsimons begin construction.Medical office buildings, senior living, ambulatorysurgery centers, and imaging centers are expectedto remain strong into the first half of 2004.


21

Nonbuilding work will experience an overalldecrease of about 15.0% in 2004. The highway por-tion of T-REX will decline in 2004, to $114 million,but southeast corridor contractors will continue tobuild the light-rail segment at a pace of about $150million. The 2004 CDOT highways budget (notincluding T-REX) will be down modestly, to $460million, excluding design and right of way.

A sharp decline in airport work is forecast for 2004.Denver International Airport’s sixth runway, whichis the longest at the facility, has been completed.More airport work will focus on security measures,

and spending will shift to the machinery andbuildings to support new those new facilities.

Like 2003, strength will continue in utility work forpipelines, water treatment plants, and dams andother water-related projects. Contractors report20.0 to 25.0% increases on minireservoir storage,pipelines, dam repairs, and water treatment plants.The Denver Water Board plans to accelerate theMoffat Collection System and expand the recycledwater distribution system. Utility work for develop-ers will see a similar increase in 2004 as the single-family market recovers to a small degree. ✜

VALUE OF CONSTRUCTION IN COLORADO BY TYPE1994-2004

(In Millions of Dollars)BUILDING PERMITS BY TYPE

1994-2004

become impossibly slim. Contracting companieshave seen the number of firms that respond to bidnotices skyrocket, and the increased competitionhas pushed down prices. Several large firms expectto retrench or seek work outside of Colorado.

Propping up the nonbuilding work has been T-REX highway work. This is the peak year of theproject, with $230 million of activity. Thanks to the sale of $100 million in bonds during 2003,CDOT will spend approximately $470 million in2003 for highway work in addition to the southeastcorridor project.


22

Manufacturing

This NAICS sector includes: Food manufacturing; bever-age and tobacco product manufacturing; textile mills;textile product mills; apparel manufacturing; leather andallied product manufacturing; wood product manufactur-ing; paper manufacturing; printing and related supportactivities; petroleum and coal products manufacturing;chemical manufacturing; plastics and rubber productsmanufacturing; nonmetallic mineral product manufactur-ing; primary metal manufacturing; fabricated metal prod-uct manufacturing; machinery manufacturing; computerand electronic product manufacturing; electrical equip-ment, appliance, and component manufacturing; trans-portation equipment manufacturing; furniture andrelated product manufacturing; and miscellaneousmanufacturing.

The state and national economic downturncontinues to be especially brutal to the manu-

facturing industry, with continual job losses postedsince 1998. While economic performance in themanufacturing industry did improve in 2003, theindustry still sustained heavy job losses. Based onthe new North American Industry ClassificationSystem (NAICS) industry definition, the manufac-turing industry lost a record 15,600 jobs in 2002.Job losses in 2003 are not expected to be quite assevere, but a further contraction of the industry, by11,000 positions, is forecasted. While the picturebrightens in 2004, it is expected that the industrywill lose another 1,100 jobs. Indeed, manufacturingjobs now account for only about 7.0% of the state’stotal employment base, down from 9.5% in 1998.

Two main themes emerged in the examination ofthe manufacturing industry this year. First, thenumber of off-shore manufacturing operations has

increased, with most industry experts expectingthat these jobs are lost to the U.S. economy forever.Second, enhanced production processes and tech-nological changes have advanced global productiv-ity at an astonishing rate. Between 1995 and 2002,global industrial production was up 30.0% even asmanufacturing employment fell 11.0%. Thismeans that manufacturers all over the world areable to do more with fewer employees due to theseproductivity increases. While there are advantagesto both off-shore operations and productivitygains, they each have their downside, namely thatdespite improving economic conditions, manufac-turing employment in the United States andColorado is still expected to decline in 2004.

Survey ResultsFor the 13th year in a row, the manufacturing com-mittee conducted a survey of Colorado manufac-turing businesses to determine their outlook on theindustry and discover their needs and concerns.Companies responding to the survey representedabout 3,700 employees or approximately 2.5% of themanufacturing employment base. Although this isa small sample size, it does give some perspectiveon the manufacturing outlook for Colorado.

Company representatives were asked whether theircompany’s performance over the past year was bet-ter than expected, worse than expected, or asexpected. Companies had expected a more positiveyear in 2003, but that did not happen. About 38.0%of the firms surveyed stated that their performancewas worse than expected, similar to last year’sresults of 37.0%. On the positive side, 33.0% noted

that their company performed better than expectedthis year compared to 30.0% last year. Twenty-ninepercent of the company representatives said per-formance was on target this year.

Companies remain cautious as we enter 2004 asevidenced by facility expansion plans for the nextthree years. More than 56.0% of the respondentssaid they have no facility expansion plans com-pared to last year when 60.0% had no such plans.On the positive side, 32.0% expect to expand theirfacilities in Colorado; this percentage was 28.0%last year. Furthermore, only 5.0% expect to down-size, the same as last year.

Outsourcing and off-shoring of Colorado manu-facturing operations are a growing concern.Indeed, planned overseas expansions were up thisyear, increasing from 3.0% in 2002 to nearly 10.0%this year. As the direction of future manufacturingorders remains uncertain, numerous companiesare outsourcing their manufacturing, productdesign, and product development activities toavoid making permanent staff changes. As the table on this page shows, companies are increasing

PERCENTAGE OF SURVEY RESPONDENTSOUTSOURCING OPERATIONS

Outsource OutsourceDomestically Internationally

2003 2004 2003 2004

Manufacturing 69% 67% 17% 21%

Product Design 21 24 2 7

Product Development 10 12 5 10


23


their outsourcing operations, both domesticallyand overseas.

Some level of outsourcing of manufacturing, prod-uct design, and product development is necessaryto remain cost competitive, provide productionflexibility, tap new sources of innovation, and cre-ate a presence in emerging markets. However, ifcompanies outsource excessively, they begin to losetheir sources of tacit knowledge generation andintellectual property. Without continuous productinnovation, companies can quickly lose their newproduct development capabilities. Within one ortwo product lifecycles these companies can relin-quish control of their processes, technologies, andproducts and end up as marketing shells. Manufac-turing firms should use caution in their outsourc-ing operations, making sure that they are notsubstituting short-term financial results for long-term strategic competitive advantage.

From 1993 to 2001, one of the major concerns ofmanufacturing companies was the availability ofworkers. Rising unemployment in the latter half of2001 through 2003 has eased some of the work-force issues facing manufacturers. In 2001, only30.0% of the responding companies thought thatthe availability of professional staff was excellent orgood. This figure jumped to 71.0% in 2003. As forhourly workers, 54.0% of the companies felt thatavailability was excellent or good this year com-pared to 23.0% in 2001.

Related to this, the percentage of survey respon-dents stating that the work ethic of the labor forceis excellent or good also increased. In 2001, 39.0%of the survey respondents were pleased with the

work ethic of their professional staff. This figurejumped to 56.0% in 2003. In 2001, 27.0% of thesurvey respondents were pleased with the workethic of their hourly staff. This figure increased to34.0% in 2003. As layoffs across industries con-tinue, employers are finding it easier to hire quali-fied workers, and it appears that employees areworking harder in the hopes of keeping their posi-tion. The table on this page details the results of thelabor questions this year compared to 2001.

Finally, companies were asked to identify opera-tional factors that would positively or negativelyimpact their operations during 2004. On the posi-tive side, 23.0% of the companies reported that theavailability/cost of financing would help them inthe coming year. Moreover, 20.0% noted that thecompany’s proximity to research colleges and uni-versities is expected to be a benefit to their opera-tions in the coming year.

On the downside, 91.0% of the survey respondentsindicated that rising health insurance costs are hin-dering business operations. Rising energy costs arealso expected to hamper business operations asnoted by 81.0% of the survey respondents.Lackluster state economic conditions (57.0%) andrising labor rates (54.0%) were also noted as nega-tive influences on business by the respondents.

Companies were also asked to identify national andglobal factors that may help or hinder their opera-tions. There were two factors that stood out aspotentially having a positive impact on Coloradomanufacturers. First, 31.0% of the respondentsindicated that outsourcing manufacturing opera-tions would positively influence their operations.Second, 20.0% of the companies indicated that thevalue of the dollar internationally is having a posi-tive impact on their operations. On the downside,numerous factors were identified as having poten-tial negative impacts on manufacturers. The factorsmost frequently cited included increasing levels offoreign competition (57.0%), more stringentdomestic government regulations (56.0%), andweak national economic conditions (55.0%).

The issues and challenges facing Colorado manu-facturers were succinctly summarized by one of thesurvey respondents.

“As long as we continue to export manu-facturing jobs, it will hurt our business.Businesses also continue to be burdened witha disproportionate share of taxes (personalproperty an excellent example). It is difficult

ATTRIBUTES OF THECOLORADO LABOR MARKET

Professional Staff Hourly Staff

2001 2003 2001 2003

Skill Level 58% 73% 34% 39%

Willingness 57 68 40 51

to Learn

Productivity 50 59 33 39

Availability 30 71 23 54

Work Ethic 39 56 27 34Note: Percentage of responding companies stating that thelabor force attribute was “excellent” or “good.”


24

enough competing with foreign labor rates,escalating health costs (that many foreigncountries do not have), unfavorable currencyvaluations, etc. without having our own local,state, and federal governments add to theproblem.”

Employment Forecast Colorado manufacturers took another beating in2003 after sustaining a record loss of 15,600 jobs in2002. The industry contracted by an additional11,000 positions in 2003, a 6.6% decline. While thepicture is brighter for 2004 as national and inter-national economies improve, employment is stillexpected to drop by 0.7%.

NONDURABLE GOODS

Under the newly implemented NAICS, the largestnondurable goods subsector in Colorado is foodmanufacturing. The value of food product ship-ments throughout the United States continues toincrease, with shipments increasing 4.3% fromAugust 2002 to 2003. Total inventories are holdingsteady, while the ratio of inventories to shipmentshas declined since the beginning of the year, indi-cating some industry strength. Employment in thefood products industry nationally shows a positivetrend, with stronger growth since the beginning of2003. In Colorado, employment in this subsector isexpected to remain at 19,500 positions in 2003, the

same level as 2002. The industry is forecasted toexpand by 100 positions in 2004.

The beverage manufacturing subsector in Coloradohas remained relatively stable since 1999. Totalemployment in 2002 stood at 5,900 positions, andis expected to increase by 100 positions in both2003 and 2004. Colorado is a leading producer ofbeer and micro-brews, and also has significantwine, water, and soda production operations.

The printing and related support activities subsec-tor includes newspaper production, commercialprinting, periodicals, books, greeting cards, andother miscellaneous publishing. Computerizationand the economic downturn have contributed to

Manufacturingcontinued from page 23

COLORADO MANUFACTURING EMPLOYMENT BY INDUSTRY GROUPS1994-2004

(In Thousands)


25

continual declines in the subsector since 1998, bothnationally and in Colorado. Computer hardwareand software has increased the ability of all compa-nies to produce and distribute reports and publica-tions electronically rather than in printed format.Furthermore, the economic downturn decreaseddemand for printed media by businesses. The totalvalue of shipments in the United States in theprinting subsector is down 5.6% from August 2002to August 2003. This decline began in 2000 whenshipments throughout the United States peaked at

a little over $9 billion. Colorado employment in theprinting and related support activities subsectorcontinues to decline, with a loss of 700 positionsexpected in 2003 followed by an additional loss of200 jobs in 2004.

The other nondurable goods subsectors includetextiles, apparel and leather goods, paper manufac-turing, petroleum and coal products, chemicals,and plastics and rubber products. With the excep-tion of the latter two categories, these subsectors

have a small, yet stable, presence in Colorado. Thetextiles and apparel and leather goods subsectorsemploy about 3,200 people, but continue to facestiff overseas competition. Roughly 2,600 peopleare employed in paper manufacturing in the state,including cardboard containers, packaging, andpaper products. Another 700 people work in thepetroleum and coal products subsector, mainlywithin petroleum refining operations. Flat toslightly declining employment is expected withinall of these subsectors in 2003 and 2004.

The chemical manufacturing subsector includespetrochemical manufacturing, industrial gases,biotechnology, pharmaceuticals, household chemi-cals, and related industries. This is a very volatilesubsector, with wide swings in individual companyemployment resulting from the success or failure of medical clinical trials and changes in the price of oil. Biotechnology is an important emergingsubsector for the Colorado economy and has beentargeted in state economic development efforts.The continued development of the Bioscience ParkCenter at the former Fitzsimons Army MedicalCenter and the transformation of this site to aneducational medical complex present long-termopportunities for the industry, though employ-ment is expected to grow by only 100 jobs in both2003 and 2004. Chemical manufacturing employsapproximately 7,100 Colorado workers.

The plastics and rubber products subsectorincludes companies producing plastic film, plasticfoam products, and other miscellaneous products.Rubber firms have a limited presence in Colorado,

MANUFACTURING EMPLOYMENT, COLORADO AND UNITED STATES1994-2004

(In Thousands)(Base Year: 1994=100)



26

Manufacturingcontinued from page 25

while the plastics industry continues to grow. Thissubsector includes injection-molding companies,which are closely tied to the biotech and electronicsindustries. The recent slowdown in those industriesmeans that employment in the rubber and plasticssubsector will decline by 200 workers in both 2003and 2004, down from the 2002 employment baseof 5,400 workers.

The other nondurable goods subsectors areexpected to decline by 600 positions in 2003

and 200 positions in 2004. This brings the totalNondurable Goods Sector employment forecast to52,800 positions in 2003, down from 54,000 jobs in2002. Employment will continue to fall slightly in2004, declining by 200 positions. Nondurablegoods employment continues to represent aboutone-third of Colorado’s total manufacturingemployment base.

DURABLE GOODS

Outputs of the nonmetallic minerals subsector are closely tied to all types of construction activity.This group includes everything from pottery,plumbing fixtures, and glass products to brick andtile and concrete and stone products. This subsectorlost an estimated 500 jobs in 2003, to end the yearwith average employment of 9,300. The T-REXtransportation expansion project is ongoing, as areother infrastructure projects, but both residentialand nonresidential construction are projected todrop in 2004, though at a slower rate. Because ofthe diversity of products in this group, andimprovement in both the Colorado and nationaleconomies, employment in this subsector shouldlevel off. Still, another small drop of 100 jobs isexpected in 2004.

The fabricated metals subsector provides materialsfor numerous other areas, everything from steelbeams for construction to component parts for amyriad of other products, virtually anything withmetal content. Employment in this industry fluctu-ates with demand from other industries. Many ofthe firms in this category are small suppliers toproducers of industrial machinery. This subsector

has endured three years of job losses, droppinganother 500 jobs in 2003, to end the year with aver-age employment of 15,200. Business investment isfinally starting to show signs of life, and this shouldtranslate into higher demand for fabricated metalproducts. However, excess capacity and the highproductivity of existing workers will temperdemand for new hires. Still, the slow state andnational recovery will help this subsector recoup200 jobs in 2004.

The largest durables goods subsector in Coloradois computers and electronics products. The years2002 and 2003 have not been good for informationtechnology and other electronics products. Follow-ing the dot-com crash in 2000 and the 9/11 terror-ist attacks in 2001, capital spending on informationtechnology equipment by U.S. companies decreasedby more than 50.0% and has stayed at a mainte-nance level during 2002 and 2003. Adding to thedrop in manufacturing activity caused by the 2001recession, the accelerating trend of outsourcingmanufacturing, product design, and product devel-opment to contract companies has transferred mil-lions of U.S. manufacturing jobs to Asian countries.

Colorado electronics manufacturing has been hitparticularly hard by these events. The outsourcingtrend shut down several state-of-the-art printedcircuit board assembly plants and final assemblyplants. The lack of demand for telecommunica-tions and Internet equipment has devastated thelocal optical networking equipment and photonicsequipment subsectors. Many companies put offpurchases of capital equipment for the manufac-turing floor, as well as software and computer

MANUFACTURING EMPLOYMENTDURABLE AND NONDURABLE


(Base Year: 1994=100)


27

systems for the front office, during the recession.However, older equipment and IT systems willneed to be replaced in the near future, and thisshould bring about new orders in those subsectors.While these new orders will eventually lead to theneed for more workers, employment conditionswill remain bleak in the short-term as companiesmake use of excess capacity and productive, exist-ing employees. Colorado employment in this sub-sector will be down by about 5,100 jobs in 2003,and decline by another 1,200 positions in 2004.

Lockheed Martin dominates the transportationequipment subsector. Increased defense and secu-rity spending in 2003 has provided LockheedMartin and Ball Aerospace with several newdefense and security-related contracts. However,other contracts have been completed and somemanufacturing activities have been transferred outof Colorado. On balance, transportation equip-ment subsector employment is expected todecrease by about 1,200 jobs in 2003 but willrebound with the addition of 200 jobs in 2004.

The other Durable Goods Sectors include woodproducts, primary metals, machinery, electricalequipment and appliances, furniture, and miscella-neous manufacturing. Employment in this diversegroup of subsectors is expected to stay flat during2003 and 2004. However, slight improvements inmany of these subsectors over the last severalmonths bode well for late 2004 into 2005.

Employment in the wood products and furnituresubsectors fell by about 900 positions between2002 and 2003 due to overall recessionary condi-tions. With decreased home construction but

improving consumer demand, the net impact isexpected to be a loss of just 100 positions in 2004.

Roughly 2,000 people are employed in the primarymetals subsector, which includes steel and alu-minum refining, as well as the manufacture ofmetal alloys and superalloys. Output from the pri-mary metals subsector provides materials for manyother subsectors, especially fabricated metals. Dueto the overall sluggishness of the manufacturingindustry, the primary metals subsector is alsoexpected to remain flat in 2003 and 2004.

Demand is strengthening for a wide variety ofgoods, with companies starting to see increases inorders for machinery, and electrical equipment and appliances. Still, with excess capacity in mostindustries, business investment has not picked upas expected. Employment within these two subsec-tors fell from 11,900 workers in 2002 to 10,700 in2003. With new orders coming in, employmentshould stabilize at about 10,600 workers in 2004.

While the shift to NAICS improved the definitionof most manufacturing sectors, the miscellaneousmanufacturing subsector became even broader.Indeed, about 4,500 Colorado workers had beenclassified in miscellaneous manufacturing under

the old Standard Industrial Classification systemcompared to about 10,000 workers now. Moreover,subsectors now classified as “miscellaneous” includeseveral that are very important to Colorado’s in-dustrial base, such as medical and dental equipmentand supplies, surgical instruments and appliances,and sporting goods production. Employment inthe miscellaneous categories fell by 400 positions in 2003 but is expected to gain 100 jobs in 2004,growing to 9,900 workers.

In total, durable goods manufacturing in Coloradolost 9,800 jobs in 2003. While conditions willimprove in 2004 as companies start to receive neworders, new employment will lag. It is expected thatthe net job loss in 2004 will be about 900 positions,bringing total durable goods employment to101,600 positions.

SummaryThe 6,000 manufacturing establishments inColorado are expected to employ about 155,300workers in 2003, representing about 7.0% of thestate’s total employment base. This is a loss ofabout 11,000 positions in 2003 as slow recoverynationally and internationally has not been enoughto foster employment growth. Most subsectorsshould experience increasing orders in 2004, lead-ing to firmer employment conditions. Still, excessdomestic capacity, continued off-shoring activities,and highly productive existing employees meanthat another 1,100 jobs will be lost in 2004. An esti-mated 154,200 workers will be employed in themanufacturing industry in Colorado in 2004. ✜

The lack of demand for telecommunicationsand Internet equipment has devastated thelocal optical networking equipment andphotonics equipment subsectors.


28

Trade, Transportation, and Utilities

transportation; scenic and sightseeing transportation;support activities for transportation; postal service; couri-ers and messengers; and warehousing and storage.

The Trade, Transportation, and UtilitiesSupersector is the largest provider of jobs in

Colorado. Despite higher sales, trade, transporta-tion, and utilities firms continued to cut jobs in2003. The number of jobs dropped by 0.8%, to409,000. Job growth should return in 2004, witheven stronger sales pushing employment up by2.0%, to nearly 415,000.

WholesaleMost of the businesses in Colorado’s wholesalesubsector are merchant wholesalers (i.e., firms thatsell to retail outlets) that account for more than90.0% of the sector’s jobs. Also included in this sec-tor are business-to-business electronic markets andagents and brokers. The sector currently employsabout 100,000 workers, two-thirds of which spe-cialize in durable goods. Tech goods play a majorrole among durables wholesalers, with computersand peripherals and electronics the two largestemployers. Sellers of groceries and related productsare the largest employer in the nondurables area.

With weakness in manufacturing, and the techsubsector in particular, durable wholesalers havelost more than 6,000 jobs in the last two years. Arebound depends on recovery in these areas. Withconditions in the state’s durable manufacturingsubsector expected to improve, durable wholesalersshould add 1,000 jobs next year following losses inboth 2002 and 2003. Nondurable wholesale activityis tied more closely to the retail subsector and theoverall performance of the Colorado economy. Astronger performance is anticipated here as well.

RetailThe state retail subsector employs nearly 250,000workers. It encompasses stores that sell directly toconsumers, including auto dealers, building mate-rial supply stores, food and beverage stores, andgeneral merchandise stores. (With the change fromthe SIC classification to the NAICS, the retail sectorno longer includes eating and drinking places, whichaccounts for more than 160,000 jobs.) Retail

WHOLESALE TRADE EMPLOYMENT1994-2004

(In Thousands)

This NAICS sector includes: Merchant wholesalers,durable goods; merchant wholesalers, nondurable goods;wholesale electronic markets and agents and brokers;motor vehicle parts and dealers; furniture and home fur-nishing stores; electronics and appliance stores; buildingmaterial and garden equipment and supplies dealers;food and beverage stores; health and personal carestores; gasoline stations; clothing and clothing acces-sories stores; sporting goods, hobby, book, and musicstores; general merchandise stores; miscellaneous storeretailers; nonstore retailers; air transportation; rail trans-portation; water transportation; truck transportation; transit and ground passenger transportation; pipeline

29


employers added an average of 7,000 new jobs an-nually through the 1990s. With a slowing economy,however, the sector has lost 4,000 jobs since 2001.

Sales growth in the state over the past three yearshas fallen well short of that in the 1990s and haseven lagged U.S. growth during the recession andtepid recovery. Colorado retail sales through thefirst eight months of 2003 are marginally ahead oflast year, with a gain of 0.3%. (Retail sales excludessales by eating and drinking places.) This repre-sents an improvement over 2002 when sales wereflat. In 2001 the increase was less than the rate ofinflation, so Colorado will likely experience threeconsecutive years of real sales decline. State salesgrowth for the 2001-03 period will probably aver-age less than 1.0% per year compared with nearly8.0% between 1995 and 2000. Colorado salesgrowth has slowed more than that of the nationover the past three years. The deterioration in statesales is more than can be explained by slower stateeconomic growth during this period, suggestingthat the negative impacts of wealth and consumerconfidence have been greater in Colorado. How-ever, it may also mean that state consumers havemore pent-up demand for consumer durables,vehicles, and other big-ticket items. If so, spendingmay surge when the recovery gets underway.

The forecast calls for 1.0% sales gain in 2003, andanticipates reasonably healthy sales in the holidayseason. The last two Decembers were noticeablylacking in cheer for retailers, who depend on holi-day sales for almost one-quarter of their annualvolume. But 2003 promises to be the best holidayselling season since 2000. The National RetailFederation estimates a 5.7% increase in U.S. holi-day sales, a marked improvement over last year’s2.2% gain. Merchants will benefit from one

additional selling day in the Thanksgivingto Christmas shopping window. However,analysts warn that these rosy expectationsmay not be met. Sluggish labor markets,rising consumer debt, and an increase inbargain hunting may cause the Grinch tomake another appearance this year.

The outlook for 2004 will be determined toa great extent by the overall performance ofthe Colorado economy. An improvementdepends on better performance in severalareas. The state must see an end to the joblosses that have put a damper on consumerconfidence since early 2001. The loss ofmany high-wage jobs in the technologyand telecommunications industries cutincome gains. Average wage and salaries

RETAIL TRADE EMPLOYMENT1994-2004

(In Thousands)

RETAIL SALES1995-2004

(In Billions of Dollars)



30

spending. But household net worth is higher than itwas in the mid-90s, thanks to surging home values.Many households locked in low interest rates, whichmake their debt service payments more manageable.High energy prices will cut into discretionaryincome, and sluggish job growth will dampenenthusiasm for major purchases.

The forecast calls for stronger sales growth in 2004, with a gain of 3.5%, which is somewhatabove the expected rate of inflation. Auto salesshould strengthen in the state. Weak sales over thepast two years suggest that Coloradans have nottaken advantage of incentives as much as people

paid per employee showed no growth in 2002 andhave fallen short of overall inflation every year since 2001.

The housing market is also critical to the retail sub-sector. Home sales frequently lead to the purchaseof furniture, appliances, and home repair materialsby the new owner. But more significant is thewealth effect of home values. Most research sug-gests that the fluctuations in home values have alarger impact on consumer spending than changesin other household assets such as stocks, mutualfunds, or retirement funds. The impact of homeprices is reinforced by low interest rates, which the

nation is now enjoying. These rates make it easierfor homeowners to tap their home equity for cash.Strong housing markets have been a major factor inpreventing any decline in U.S. consumer spendingduring the recent recession and weak recovery.Colorado housing prices have slowed over the pasttwo years but are still posting gains. The fearedcollapse in the housing bubble has been avoided.Improved sales in 2004 will require that housingmarkets, at worst, stabilize.

Other clouds on the horizon include consumerdebt, which is at record levels nationally and prob-ably in Colorado as well. This limits any recovery in

Trade, Transportation, and Utilitiescontinued from page 29

TRANSPORTATION AND WAREHOUSING EMPLOYMENT1994-2004

(In Thousands)


31

elsewhere in the nation. This should mean morepurchases of new cars when the economy begins toimprove. General merchandise stores will benefitfrom healthy holiday sales and faster job andincome growth. While sales gains in 2004 will behigher than any of the previous three years, theywill still fall well short of those in the 1990s.

Retail firms are forecast to add some 3,000 jobsnext year after losing 1,000 in 2003. By late 2004the number of jobs in the subsector will be back tothe peak level reached in early 2001. Job gains will,for the most part, be caused by increased sales vol-ume. No new large retail centers are scheduled toopen before late 2004, and store closings, includingthree Lord & Taylor metro outlets, will mean somejob losses.

Retail Real Estate DevelopmentsDespite prevalent views that Colorado’s FrontRange has too much retail space, new outlets con-tinue to surface. The still rapid pace of new housingdevelopment has stimulated retail outlets, whichtend to “follow the rooftops.” New urban infillshopping centers have also been developed, such asBelmar (the old Villa Italia) and Stapleton Plaza.Developers of Belmar report 70.0% of the firstphase of development is leased. The 1.5-million-square-foot Southlands regional center is sched-uled to open in late 2004.

No other large new shopping areas are foreseen inthe immediate future, although discussions con-tinue for a large development at I-25 and 160th.Store closings have occurred in the most competi-

tive segments of the market. Department storescontinue to be squeezed between the high-endboutiques and discount stores. The growing role ofWal-Mart in the already competitive grocery mar-ket contributed to Cub Foods’ decision to with-draw from the Front Range. In both cases, otherretailers either committed to taking over the aban-doned space or are in the process of doing so.

Transportation and WarehousingThe Transportation and Warehousing Sectorincludes air, railroad, and water transportation;trucking; taxi service; urban transit; couriers; ware-housing; and pipelines companies. These industriesare expected to contribute 65,700 jobs in 2003 and66,600 in 2004. Employment in the sector fell by0.8% in 2003, due in part to the weakness in airtransportation, couriers, and warehousing. Condi-tions in these subsectors should improve in 2004,resulting in a 1.4% gain in transportation andwarehousing employment.

REGIONAL AIR TRANSPORTATION

According to a recent study by the ColoradoDepartment of Transportation (CDOT)–Aeronautics Division that updates the economicimpact of aviation in Colorado, the state experi-enced moderate to substantial increases in mostaviation areas studied.

In 1996 the Colorado aviation industry totaled246,000 jobs, and increased to 280,156 in 2002, again of 34,156 positions, or 13.9%. The annualgrowth rate for the 1996 to 2002 period was 2.31%,or 5,692 jobs per year. The study reports that

Colorado aviation wages were approximately $9.8billion in 2002.

In the same study, the economic impact of Colo-rado aviation was reported to total approximately$23.5 billion in 2002, which represents an increase of$9.2 billion, or 39.1%, compared to the economicimpact in 1996. The annual growth rate for theperiod was 6.5% per year, or a gain of $14.0 billion.

Concerns expressed by airport operators, airlines,general aviation aircraft operators, and businessesinclude:

1) Airport inefficiencies due to security measures;

2) Increased competition at hub airports and dete-riorating service to smaller metropolitan andrural areas;

3) Uncertainty of the price of aviation petroleumproducts; and

4) Uncertainty of the price of labor.

COMMERCIAL AIR TRANSPORTATION

Denver International Airport (DIA), whichaccounts for nearly 90.0% of the state’s aviationeconomic activity, posted modest activity increasesin 2003. Passenger traffic increased to pre-9/11levels, although cargo freight and air mail remainedat lower levels. On a national level, DIA activity hasoutperformed the commercial aviation system byposting an increase of 2.9% in 2003, while thesystem has seen a decrease in activity of nearly3.2%. Activity at DIA is expected to continue itsgrowth pattern in 2004, due to a terminal expan-



32

sion project, anticipated international service con-nections, and an expansion of Frontier Airline’sroute structure.

The Colorado Springs Airport (COS) has beenexperiencing negative growth since 1997, even to a greater magnitude than the commercial aviationsystem. The COS, which accounts for around10.0% of the state’s commercial aviation activity,is expected to suffer another decline in 2003 ofapproximately 4.9%, and the trend is expected toextend into 2004.

RAIL TRANSPORTATION

Colorado’s rail freight industry is dominated byBurlington Northern-Santa Fe and Union Pacificrailroads, which own and operate 91.0% of the railtrack in the state. Nationwide, carload rail traffichas been flat in 2003, with intermodal traffic upnearly 7.0%. The value of Colorado rail shipmentsis currently estimated at around $10 billion.

RTD is moving ahead with a proposal to fundFastTracks. Under the plan, Denver’s historicUnion Station would become a transportation hubwith commercial buildings and rail and regionalbus stations located underground. The projectwould also vastly expand rail services, with newlines to Arvada, Boulder, DIA, Highlands Ranch,Lakewood, and Longmont.

At the same time, the CDOT is studying a plan tomove most of the freight trains out of downtownDenver and onto the Eastern Plains. If imple-mented, two-thirds of the freight trains would berelocated far outside the congested city center. A

similar plan is being examined for downtownColorado Springs.

Motor Freight Transportation andWarehousingThe outlook for the trucking industry is improvingas freight shipments and tonnage have grown on anational and regional basis. Demand in some caseshas begun to outstrip capacity, which has allowedcarriers to obtain slight increases in shipping rates,improving the bottom line for many truckingcompanies.

Key factors that will determine how trucking willfare in the next year include how well state andregional shippers recover, fuel costs, and insurancerates. In the past year diesel fuel prices have fluc-tuated but have been generally high. Carrierscontinue to experience significant problems inpassing these costs along to shippers in a timelymanner. Any major spike in fuel rates will substan-tially affect the profitability of the trucking indus-try in the state.

Insurance costs, particularly relating to propertyand casualty, also represent a wild card regardingthe recovery of trucking companies within thestate. In the past two years, following 9/11, trucking

companies have experienced considerable increasesin premiums, averaging more than 70.0%. Initialindications from the insurance industry reflectstabilization in the marketplace, with only modestincreases anticipated.

Mergers and acquisitions will also determine howthe trucking subsector fares in Colorado in 2004.The impact of the acquisition of Roadway, one ofthe largest less-than-truck load (LTL) carriers inthe country, by another huge LTL carrier, YellowCorporation, is yet to be determined. Like otheracquisitions, some contraction in jobs should beanticipated in management and in other areas.In addition, the consolidation of these two majorcarriers, along with the failure of one of the othernational LTL carriers, Consolidated Freightways,may translate into higher rates for shippers.Additional acquisitions and mergers should beanticipated as continued consolidation occurs inthe trucking industry.

Colorado has a disproportionate flow of freightinto the state versus out of the state. To a largeextent, this may be attributed to the lack of majormanufacturing centers within the state, as well asdistribution centers and other business activitiesthat traditionally generate truck activity.

Growth in the trucking subsector has been ham-pered by a state tax climate that provides a less thancompetitive environment. Colorado ranks as thefourth highest state in the country in transportationtaxes and fees, placing Colorado-based companiesat a substantial cost disadvantage to trucking oper-ators in surrounding states. Because of this situa-


CDOT is studying a plan to move most ofthe freight trains out of downtown Denverand onto the Eastern Plains.


33

tion, many trucking companies and distributioncenters with substantial transportation operationshave selected other states in lieu of Colorado.

The sale of heavy-duty truck tractors has sufferedin the past two years because of concerns relatingto the 2002 engines required by the EnvironmentalProtection Agency. Because of questions regardingthe reliability and reduced fuel economy associatedwith the new engines, firms are avoiding purchas-ing new trucks in the past year in lieu of late modelused trucks or are deferring purchases of trucks.This situation, which negatively impacts new trucksales in the state, is somewhat offset by increasedbusiness in the parts and maintenance area.

For 2004 we anticipate that new truck sales willrebound as confidence grows in the new engines.Furthermore, an improving economy should alsolead to better truck sales as trucking companiesrealize growth and acquire both tractors and trail-ers to accommodate that growth.

OVERVIEW OF TRUCKING INDUSTRY IN COLORADO

• The trucking industry and associated activitywere estimated to provide 127,791, or 1 out of 16of all jobs in Colorado, in 2000.

• Total trucking industry wages paid in Coloradoin 2000 exceeded $4 billion, with an averagetrucking industry salary of $31,526.

• A total of 75.0% of Colorado’s manufacturedfreight moves by truck.

• Trucking serves every community in Colorado.Nearly 80.0% of all communities depend exclu-sively on trucking to supply their goods.

UtilitiesElectric, gas, and water utilities faced many chal-lenges in 2003. Natural gas prices moved higher,pushing up the cost of heating homes and produc-ing electricity. At the same time, water utilitiesurged conservation as they struggled to reboundfrom severe drought conditions in 2002.

Volatility and price spikes have taken the luster offof natural gas as the fuel of choice. In 2003, whole-sale natural gas prices moved up in Colorado andthroughout the nation. Average prices haveincreased by more than 60.0% over the past year,from around $3.40 to $5.50 per MMBTU at thenational trading hubs. Prices jumped up by a simi-lar amount in Colorado, but from a much lowerbase. Colorado wholesale prices have averaged$4.10 this year, up 116.0% from $1.90 in 2002.

Nationally and in Colorado, gas utilities wereforced to pass these cost increases along to retailcustomers. The fact that Colorado retail natural gasprices remain significantly below the national aver-age prices has been little comfort to consumers.

Colorado natural gas consumption has fallen by 3.5% this year based on warmer than averageweather compared to 2002. New natural gas-basedgeneration and average weather are expected topush up natural gas demand in 2004 by 4.8%, to392 billion cubic feet.

TRADE, TRANSPORTATION, AND UTILITIES EMPLOYMENT1994-2004

(In Thousands)



34

Retail electricity prices moved up in 2003 as utili-ties passed on the higher cost of using natural gas-fired generation to customers. More naturalgas-based generation will be coming on line in2004, raising the prospects of higher fuel-relatedelectricity prices.

Electricity consumption continues to swell withhousehold growth and new technologies.Electricity consumption in Colorado grew from45,443 million Kwh in 2002 to an estimated 45,772

million Kwh in 2003. Consumption growth shouldaccelerate next year with an improving economy.

Electric and gas utilities continue to look for effi-ciencies and new business opportunities. Utilitiesare reducing staff and reorganizing their businessesat lower costs. They are moving away from the“one-size-fits-all” utility approach to one that’smore focused on customers’ needs.

Many natural gas and electric utilities have sufferedsignificant losses in their nontraditional deregulated

businesses. There has been a widespread pullbackfrom electricity deregulation. As a result, utilitiesare focusing on basics and looking for ways toimprove or exit nontraditional businesses.Currently, there are no active efforts to bring retailelectricity competition to Colorado. In 2003,increased efficiency held utility jobs flat inColorado. Gains of approximately 100 jobs areexpected in 2004. ✜

COLORADO NATURAL GAS CONSUMPTION1998-2004

(In Billions of Cubic Feet)

COLORADO ELECTRIC POWER CONSUMPTION1994-2004

(In Millions of Kilowatt Hours)



35

This NAICS sector includes: Publishing industries(except Internet); motion picture and sound recordingindustries; broadcasting (except Internet); Internet pub-lishing and broadcasting; telecommunications; Internetservice providers, web search portals, and data process-ing services; and other information services.

Overview

This sector comprises establishments engagedin the following processes: (1) producing and

distributing information and cultural products,(2) providing the means to distribute these prod-ucts or data, and (3) processing data. The uniquecharacteristics of information and cultural prod-ucts and their production and distribution distin-guish the Information Supersector from thegoods-producing and service-producing sectors.Some of these characteristics are:

1) Unlike traditional goods, an “information orcultural product,” such as an on-line newspaperor television program, does not necessarily pos-sess tangible qualities, nor is it associated with aparticular form.

2) Unlike traditional services, the delivery of theseproducts does not require direct contactbetween the customer and the supplier.

3) The value to the customer lies in the informa-tional content, not in the format in which theyare distributed. Most products are protected bycopyright laws.

4) The intangible property aspect of these productsmakes the processes involved in their productionand distribution quite different from goods and services.

5) Distributors can easily add value to the productsthey distribute (NAICS Manual 2002).

It is projected that the information technologyindustry worldwide will grow 34.0% between 2001and 2006. This growth rate could be closer to49.0% if global software piracy were to be reducedby 10.0%. The United Kingdom, where softwarepiracy rates are the lowest in Europe (25.0% in2001), has a very high growth rate in the informa-tion technology software industry and services.Almost 200,000 new jobs were added between 1995and 2001. Spain has significantly reduced softwarepiracy since 1996; the growth rate in its informa-tion technology software industry between 2001and 2006 is projected to be three times faster thanbetween 1995 and 2001 (European Report 2003).

Information


2002 INFORMATION EMPLOYMENT, WAGES, AND ESTABLISHMENTS


36

EmploymentFrom 1993 to 2002, the Information Supersectorgrew at a compound annual growth rate (CAGR)of 6.46%. A review of the Colorado Department ofLabor and Employment ES202 data for 2002 pro-vides some additional insights. As expected,employment in the Information Supersector inColorado is focused largely in the Telecommunica-tions and Publishing Industries (except Internet)Sectors. The two sectors comprise 42.4% and33.3%, respectively, of total information employ-ment in Colorado. Perhaps more significantly, theaverage weekly wage is $1,215, more than 66.0%higher than the state average weekly wage.

PublishingThe Publishing Sector accounts for 33.3% of over-all Information Supersector employment. Withinthis sector, the largest employer is software publish-ers, with nearly 49.0% of the total publishingindustry employment in Colorado and slightlyover 50.0% of the establishments. The secondlargest publishing group, newspaper publishers,employs nearly 23.0% of the workers and makes upnearly 13.0% of the publishing establishments inthe state.

This area has seen employment growth rates higherthan that of the state during the 1993 to 2002period. During that time, the CAGR was 7.1%.However, this area, like most in the state, has suf-fered during the past two years. The publishingsubsector lost 3,600 jobs in 2002, approximately10.0% of its employment base. Employment hascontinued to decline in 2003, although at a much

slower pace as an additional 400 jobs have beeneliminated. The future appears brighter as 400 newjobs are forecast in 2004.

NEWSPAPER, PERIODICAL, BOOK, AND DIRECTORY

PUBLISHERS

This subsector had an extremely high annualgrowth rate of 15.1% during the 1993 to 2002period, but has endured significant cutbacks sincethat time. In 2002, 1,500 jobs were lost and thattrend has continued, albeit at a much slower pace.In 2003 an additional 200 jobs disappeared. By allappearances, this trend has already reversed itself.Newspaper and periodicals appear to be addingmarketing and sales staff now that advertisingbudgets have once again started to rise.Nonetheless, the growth in this area will be modestas automation and cost conscience behavior willlimit hiring in other administrative positions andin the news gathering area.

SOFTWARE PUBLISHING

Software is an enabling technology that has appli-cations in every market in the economy. The soft-ware market consists of three major segments:

• Software package developers (also called ISVs—independent software vendors),

• Software integrators and consultants, and

• Software custom developers.

The Information Supersector only includes thepublished software component of software.Software integrators and consultants and customsoftware developers are included in Professionaland Business Services Supersector.

Without an elaborate discussion of the custom soft-ware area, suffice it to say some areas are expectedto grow. One such example is the security softwaremarket, which was forecast to grow 18.0% in 2002,according to a report published by Dataquest, a unitof Gartner Inc. Sales of security software world-wide will reach $4.3 billion in 2002, up from $3.6billion the previous year. Companies want betterdefensive security technologies, such as antivirussoftware, intrusions detection systems, and firewalls(Newsbytes News Network 2002). Continued growthin 2003 and 2004 is indicated in this area. To thedegree that this type of software becomes a pub-lished product, the information area will benefit.

While overall spending for software has slowed in the current slack economy, AMR Research, amarket research firm, projects that supply chainsoftware packages (execution and fulfillment appli-cations) will record $6.4 billion in sales in 2003.Furthermore, sales are projected to grow 26.0%annually, to $13.6 billion, by 2006. End-user com-panies are changing from planning to executionapplications, such as warehouse management andtransportation management systems. Planning

Informationcontinued from page 35

The Information Supersector in Coloradois focused largely in the Telecommunica-tions and Publishing Industries (exceptInternet) Sectors. The two sectors com-prise 42.4% and 33.3%, respectively, oftotal information employment in Colorado.


37

applications, which generally forecast demand, willgrow by only 9.0% annually to 2006 (ModernMaterials Handling 2002).

Colorado’s Competitive Position

Colorado is ranked fifth in the United States forsoftware services employment, and the Boulder-Longmont “diagonal” has been ranked as the lead-ing area in the country for software employmentfor the past four years, according to a nationaltrade organization, the Software and InformationIndustry. In this national ranking, Denver was 13thand Colorado Springs was 24th (Boulder CountyBusiness Report 2003).

Software industry leaders agree that the Coloradoindustry has many competitive strengths, includingan educated labor force, access to good universitiesand colleges, people with innovative ideas, anentrepreneurial culture, a lower cost of living andcost of doing business, and many software compa-nies with diverse products and services. In addi-tion, the industry is supported by the ColoradoSoftware & Internet Association, a nine-year-oldtrade organization offering public policy, advocacy,programming, affinity, and leadership for softwarecompanies (Software Industry Focus Group/Survey, August 2003).

The software publishing area had excellent growthduring the 1993 to 2002 period, with a CAGR of15.1%. This reflected the increasing importance ofthe information or knowledge-based economy, butalso marked the boom of the Internet and other tech-related overinvestment. That growth was followedby a loss of 2,100 jobs in 2002 and an additional 200this year. In 2004, a more positive technology-based economy will drive growth of 200 jobs.

Motion Picture and Television IndustryIn June 2003, the Business Research Division of theLeeds School of Business at the University of Colo-rado at Boulder completed a comprehensive study,The Impact of the Film Industry on Colorado. Theresearch revealed the following for 2001:

• Film and Video Production, Freelance Crew, andSuppliers

–$205.5 million in wages

–3,933 jobs

• Television Stations and Cable Companies

–$1.2 billion in wages

–15,622 jobs

• Film Commissions and Production Statewide

–Approximately 70 communities throughout thestate support a local film commission contact.

–Between 1997 and 2000, concentrations of pro-duction-related companies became evident inthe following areas outside the Denver metroarea: El Paso County, Eagle County, andSummit County.

• Film Festivals

–Approximately 87,000 people attendedColorado film festivals.

–Approximately 60 full-time equivalent employeesand 1,800 volunteers worked at these festivals.

–Total film festival spending in Colorado was$12.6 million.

• Colleges and Universities

–Approximately 2,000 students were enrolled infilm programs with a production emphasis.

The study further reported that:

• This industry pays higher than average wagescompared to the state as a whole.

• This industry grew faster in the past 10 yearsthan the Colorado economy

• The basic infrastructure is stronger thananticipated.

The researchers found that the entertainment indus-try presents several distinct advantages to the state.

• It is a tool for economic development through-out Colorado. Filming took place in at least 40 ofthe state’s 64 counties in 2002.

• It attracts new dollars to the state’s economy. In2001, 75.0% of receipts for production compa-nies came from out of state.

• It is not necessarily tied to normal economic pat-terns. When the economy falters or is flat, thissegment continues to grow.

• It encourages tourism. It is a clean industry thatincreases exposure of the state.

• It culturally enriches the state.

A growing independent film community withinColorado has resulted from the increasing numberof film students in-state, as well as from changingtechnology that makes it easier and less expensiveto produce a movie. Currently, the Colorado Filmand Video Association has more than 560 mem-bers. Several venues regularly exhibit Colorado-produced projects, including the unique nonprofitStarz FilmCenter in Denver and a number ofmicro-cinemas.



38

On a global scale, industrywide changes and thedownturn in the world economy continue to nega-tively affect the employment of freelance produc-tion crews in Colorado and throughout the UnitedStates. In addition to Canada, the major competi-tor for the past several years due to a favorableexchange rate and considerable tax incentives,Australia and New Zealand have continued asimportant players in this arena. Mexico, EasternEurope, South Africa, China, and other Asiancountries are also competing for and attractingU.S. production dollars. An interesting result is thatthe role location filming plays in tourism develop-ment has taken on a new significance worldwide.

The Monitor Report estimated that “runawayproduction” cost the U.S. $10.3 billion in 1998,

and the figure has increased in the past five years.In response, several states have instituted financialincentives in order to keep these production dollarsin the United States. New Mexico and Louisiana areleaders in this movement, with Illinois, New Jersey,and Oregon passing recent incentive legislation.Such incentives are not available in Colorado, andthe expense of shooting here continues to be a hur-dle in attracting location filming. The bipartisanUnited States Independent Film and TelevisionProduction Incentive Act of 2003 that proposedwage credits was introduced in Congress this year,with 20 cosponsors in the U.S. Senate (S.1613), and67 in the House of Representatives (H.R.715).

In October 2003, the Association of FilmCommissioners International held their annual

educational conference, Cineposium, in San Diego.More than 200 film commissioners attended, rep-resenting 30 countries. For the first time since theinitial Cineposium was held in Denver in 1976,foreign attendees outnumbered U.S. film commis-sioners. Due to severe deficits, several U.S. state andcity film offices experienced extreme budget andstaff cuts in the past year. In March 2003, a dedi-cated budget was eliminated for the Colorado FilmCommission, originally established in 1969.

Despite these factors, the potential for growth isevident. PriceWaterhouseCoopers projects in theirGlobal Entertainment and Media Outlook: 2003-2007 that the industry will reach $1.4 trillion in2007 from $1.1 trillion in 2002, a 4.8% averageannual growth rate. Notable for their projected


CHANGES IN INFORMATION EMPLOYMENT(In Thousands)


39

growth rates are the following sectors: filmedentertainment; TV networks: broadcast and cable;video games; and educational and professionalbooks and training.

The International Intellectual Property Alliance(IIPA) reports the following on the copyright in-dustries (i.e., movies, TV programs, home videos,books, music, computer games, and software):

• These industries were responsible for 5.0% of thegross domestic product (GDP) of the UnitedStates in 2001.

• Their share of GDP grew more than two times as fast as the remainder of economy in the past25 years.

• New job creation is three times the rate of therest of the economy.

• They represent more international revenues thanautos and auto parts, aircraft, and agriculture.

• The movie industry alone, unlike any otherAmerican industry, has a surplus balance of tradewith every single country in the world.

These data suggest an increasing global demand for entertainment and media products. In addition,technology is rapidly changing the industry, and themove toward high-definition production and distri-bution could present an opportunity for Colorado.

A significant finding from The Impact of the FilmIndustry on Colorado is the following: “As Coloradohas one of the highest concentrations of computer,communications, and technology companies in thecountry, it is positioned to jump on the digitalbandwagon and climb to the top of the film indus-try . . . . If Colorado undertakes to stimulate the

growth of the digital media segment, it has thepotential to be a leader in this field.”

TelecommunicationsFor many years, Colorado has been a major playerin the area of telecommunications. In the late nine-teenth century, as the telephone system expandedthroughout the country, Denver became the hub of the nation’s longest north/south telephone line.Since then, the city has continued to be a key loca-tion for telephone companies. Due to the area’sgeographic location and strong military presence,Colorado became a leader in the field of satellitecommunications in the 1940s. This continued dur-ing the Cold War and laid the groundwork for thetech boom in the 90s. Denver was also the birth-place of cable television more than 50 years ago,and the city has held its position as a cable center.Today, Denver is home to The Cable Center, anindependent, global institution that works with thecable industry. These developments gave rise to theterm “Convergence Corridor” to describe Coloradoas the place where telecommunications, satellites,and cable television come together. This fact, alongwith the quality of life in Colorado, the concentra-tion of telecom-related industries (especially pho-tonics and software), and the highly educatedworkforce, makes the state an attractive place to

locate a telecommunications business (EDCC/OEDReport 2003).

Historically, the strength of Colorado’s telecomindustry has been in setting up and running cableand telephone networks. Telecom equipment man-ufacturing, although present, has never beenprominent in the state. This trend is expected tocontinue as the state’s telecommunications indus-try builds on its strengths in satellite and cable net-work services.

However, over the last couple of years, telecommu-nications companies in Colorado have struggledmightily. The telecommunications industry col-lapse has been blamed for the weak state economyof today. Bankruptcies, mergers, and acquisitionshave resulted in the loss of thousands of jobs.Between January of 2001 and March of 2002, anaverage of 585 communications jobs was lost eachmonth (2003 Colorado Business Economic Outlook).These cuts continued through the end of the 2002and into 2003. Qwest, AT&T, WorldCom, Sprint,and many other telecommunications firms have allannounced significant layoffs since 2001. Financialand legal struggles have also plagued the industry.Many experts cite excessive optimism, excess capa-city, lack of adequate funding, decreased demand,and poor management as sources of telecom’s woes.

How bad has the telecom collapse in Coloradoactually been? According to employment and wagedata from the Colorado Department of Labor, inthe first quarter of 2001 there were 1,154 telecomcompanies in the state, employment totaled 48,893,and wages exceeded $871.2 million. Since then, thenumber of companies has dropped by 16.0%, to968 in the fourth quarter of 2002. Employment fell


These data suggest an increasing globaldemand for entertainment and media prod-ucts. In addition, technology is rapidlychanging the industry, and the move towardhigh-definition production and distributioncould present an opportunity for Colorado.


40

to 37,585, a 23.1% decrease, and total wagesdeclined 28.4%, to $624.2 million. Average wageshave also fallen 7.0%, from $71,277 in Q1 2001 to$66,430 in Q4 2002. However, when this industry is viewed in a longer term context, the picturelooks different. While there has been a significantdownturn in the telecommunications industryover the last couple of years, overall, the industryhas still grown dramatically since 1993. Employ-ment rose sharply during the 90s and then felldrastically in 2001, but has remained well aboveemployment levels of the early 90s.

What will drive the future health of telecom-munications? The answer is that it will likely be a multitude of factors. A more robust economy will probably spur some additional demand. Anincreased use of the Internet for transactions willalso consume some of the capacity. Additionaldemand for capacity from emerging industriessuch as photonics will play a role. And certainly the consolidation of the industry that has occurredover the past three years will help.

Colorado industry experts are generally optimisticabout the future of telecom in Colorado. Mass lay-offs in the industry have created a large group ofskilled, experienced employees looking for work.With the labor pool already in place, Colorado will be an attractive place for new or relocatingcompanies. Additionally, companies that let go largeportions of their workforce are now dealing withthe problems of being greatly understaffed. As cus-tomer service becomes a bigger concern, these firmswill have to rehire some of the positions they elimi-nated. Furthermore, new technologies, such as web

conferencing services, voice-over IP and cable,broadband wireless, and Wi-Fi, are expected to stim-ulate demand in the industry. The passage of theHomeland Security Act of 2002 has also made fundsavailable for security-related telecom products andservices. While this has not fueled growth in theindustry yet, it offers significant potential (TelecomIndustry Focus Group/Survey September 2003).

In an effort to make these same opportunitiesavailable to people in the state’s rural areas,Colorado has embarked on the Multiuse Network(MNT) Project. The state contracted with QwestCommunications International Inc. to build ahigh-speed data network stretching to each of thestate’s 64 counties. By providing Internet access toevery county in the state, the project takes the firststep in the “last-mile” solution. The focus of thelast-mile issue is now making broadband Internetaccess available to every household and businesswithin these counties. By making high-speed,broadband Internet available to rural areas ataffordable rates, the state will foster growth in smallbusinesses and benefit local governments. Newbusinesses will be more likely to locate in theseareas, and new jobs could be created. Broadbandtechnology has the potential to jumpstart ruraleconomies. As of September 2003, 62 of the 70

planned aggregated network access points arecompleted, with the additional 8 scheduled to befinished by the end of the year (OED/TelecomIndustry Focus Group/Survey September 2003).

EMPLOYMENT AND WAGES

Telecommunications accounts for 42.4% of theentire Information Supersector employment.Within the Telecommunications Sector, wiredtelecommunications carriers employ more than70.0% of the telecom workers in the state andmake up nearly 55.0% of the establishments.

In 2002, Colorado’s telecommunications industryemployed 39,700 people, representing more than3.3% of the total telecom employment in theUnited States. These 39,700 telecom employeesmake up over 1.8% of Colorado’s total employ-ment. With a concentration almost twice that ofthe nation, Colorado is clearly a leader in thetelecommunications industry.

Perhaps more importantly, based on 2002 data,there were 1,010 telecom companies in the state,and these firms paid out a total of $2.69 billion inwages. Average wages in the telecom industry for2002 were $67,842—79.0% higher than the state’saverage wage for all industries combined and20.0% more than the national average for telecomemployees.

During the 1993 to 2002, employment in the tele-com sector has doubled in Colorado, with a CAGRof over 6.7%. Telecom employment growth inColorado has been nearly two and a half timesfaster than that of the nation.


By making high-speed, broadband Internetavailable to rural areas at affordable rates,the state will foster growth in small busi-nesses and benefit local governments.


41

This area experienced severe job losses followingthe tech bust and has continued to suffer from thecontinuing excess capacity in the industry. During2002, 7,100 or 15.0% of the jobs were lost. That hasbeen followed by an additional 8.0% or 3,300 lostthis year. The future appears much brighter ascapacity issues are being resolved. Look foremployment growth of 1,700 jobs in 2004.

Other Information Services SectorTechnically, there is a NAICS sector entitled “OtherInformation Services.” In Colorado this groupaccounts for between 100 and 200 jobs. For thepurpose of our analysis, we are grouping theemployment discussion of all remaining parts ofthe Information Supersector into this section. Thisincludes motion picture and sound recording

industries; broadcasting (except Internet); Internetpublishing and broadcasting; Internet serviceproviders, web search portals, and data processingservices; and other information services. In total,these other categories account for 21,500 employ-ees and approximately 24.0% of the supersector.

This “other” group experienced a 5.2% CAGR during the 1993 to 2002 period. While this is quitestrong, it is weaker than the telecommunicationsand publishing pieces of the Information Super-sector. While one might think that the slowergrowth rate may have been beneficial in the down-turn, the other category has continued to loseemployment at a pretty significant rate over thepast two years. In 2002, 3,000 jobs were eliminated,and in 2003 an additional 1,200 have disappeared.As discussed in previous sections, we believe that

several of the “other” categories will once againexperience growth and an increase of 1,200 posi-tions is forecast for 2004.

SummaryThe Information Supersector is poised for a turn-around. While we are only forecasting modestgrowth in the year ahead, it will be a welcome reliefto an industry that has experienced heavy lossesover the past two years. The publishing area(including software) should experience somegrowth, with increased advertising budgets andinvestment expenditures.

Colorado’s telecommunications industry shouldalso expand. With both state and national eco-nomic recoveries on the horizon, the industry ispoised to grow. While the growth levels seen in the90s will likely never be replicated, the future appearsto be bright. Colorado’s large pool of unemployedtelecom workers; concentration of software, pho-tonics, and other telecom-related industries; andquality of life can attract new companies. Existingfirms should benefit from reduced competition,the affordable assets made available through bank-ruptcies, and exciting new technological advance-ments. How much of this growth will occur in2004 remains to be seen, but longer term industrygrowth seems likely. Whether Colorado will returnto top tier status in telecommunications is the criti-cal long-term question. Expansion of currentefforts by the state government to provide “last-mile” access to broadband will bring these benefitsto Colorado’s rural communities and help equalizeeconomic opportunity in all areas of the state.

Overall sector employment is expected to rise by3,300, or 3.7%. ✜

INFORMATION EMPLOYMENT1994-2004

(In Thousands)

42


Financial Activities

This NAICS sector includes: Monetary authorities-central bank; credit intermediation and related activities;securities, commodity contracts, and other financialinvestments and related activities; insurance carriers andrelated activities; funds, trusts, and other financial vehi-cles; real estate; rental and leasing services; lessors ofnonfinancial intangible assets (except copyrighted works).

The Financial Activities Supersector is com-prised of the Finance and Insurance Sector

and the Real Estate, Rental and Leasing ServicesSector. This supersector has been one of the brightspots in the Colorado economy during 2003.

The Finance and Insurance Sector includes mone-tary authorities—central bank; credit intermedia-tion and related activities; securities, commoditycontracts, and other financial investments andrelated activities; insurance carriers and relatedactivities; funds, trusts, and other financial vehi-cles. In addition to real estate jobs, the Real EstateSector includes rental and leasing services andlessors of nonfinancial intangible assets (exceptcopyrighted works).

Between 1993 and 2002, the Financial ActivitiesSupersector grew at a compound annual growthrate (CAGR) of 2.8%, with the strongest employ-ment growth occurring in securities, 6.6%, andcredit organizations, 3.7%. Insurance employmentincreased at a CAGR of 3.2% and real estateemployment increased at 2.6%.

In 2003, the Finance and Insurance Sector isexpected to decrease by 1,100 jobs, while the RealEstate, Rental and Leasing Services Sector is pro-jected to remain flat. In 2004, an additional 200

jobs are expected to be added in the Finance andInsurance Sector, while the Rental and LeasingServices Sector will show a gain of 500 jobs.

Finance and Insurance Sector

COMMERCIAL BANKING OUTLOOK FOR 2004Trends in the banking industry will continue tochange in 2004. In the area of loan growth, 2003benefited from good consumer loan demand

(primarily mortgage and home equity due to lowinterest rates), while demand for commercial creditwas weak, similar to 2002. Trends in 2004 will showslower consumer growth due to weaker mortgageactivity and increasing demand on the commercialside after three years of lackluster growth. The levelof commercial demand will depend on the pace ofeconomic recovery.

Net interest margins should stabilize in 2004 asmuch of the asset repricing that has pressured

FINANCIAL ACTIVITIES EMPLOYMENT1994-2004

(In Thousands)


43

margins has run its course. We do not expect anymargin expansion until the Federal Reserveincreases short rates, which would start the repric-ing of variable rate assets upward while anyincrease in deposit rates would lag.

Fee income should also transition in 2004. The bigdrivers of fee income in 2003 were mortgage bank-ing and deposit fees. We forecast mortgage bankingfees to be flat to down as mortgage originationactivity is projected to decline by 50.0% in 2004.However, we expect to see an increase in loan ser-vicing fees as a partial offset to lower originationfees. Deposit fee growth should slow with theexpected moderation of growth in the deposit base.On the positive side, banks are projected to experi-ence expanding capital markets and asset manage-ment fees, with the better market and higherinsurance revenues from increased market share ofinsurance sales. Expense growth in 2004 is likely tobe slower than in 2003 as growth from pension andoption expense should moderate.

Credit quality should be a bright spot for banks in 2004. Problem loans and loss rates have peakedand should improve throughout the year, returningto a more normalized level by 2005. Overall, theindustry remains well capitalized and fundamen-tally sound.

As the equity markets began to show signs of life inlate 2002, there were signs that total bank depositswould decrease as money was transferred to morelucrative investments. This transfer of funds to theequity market seems to have been only temporaryas a result of the mutual funds scandals. It is also

felt that companies are becoming more profitable,that corporate loans are down, and that firms arebuilding their cash reserves, at least for themoment, until they are completely comfortablewith either investing in other financial tools orincreasing their capital expenditures. Deposits areexpected to grow through 2003 into 2004, but at amuch lower rate than recent years.

SAVINGS AND LOANS

In 1995, about 5.5% of total deposits were held insavings and loan (S&L) companies. Total S&Ldeposits dropped to less than 1.5% in 2000 as con-solidations and changes in federal regulationsmade other investment opportunities more lucra-tive. Since then they have increased slightly as con-sumers viewed them as safer investments thanvolatile equity or real estate markets. This trend isexpected to continue, although growth will occurat a much lower rate than in previous years.

Less than 1.0% of financial activities employeeswork at S&Ls. Employment is this area is expectedto increase slightly in both 2003 and 2004.

CREDIT UNION TRENDS

With the slow economic recovery and low interestrate environment expected to continue through2004, there will be continued pressure on creditunion net margins. Credit union cost of funds isgreatly influenced by fed rates. Many membershave taken advantage of the low interest rates torefinance existing or purchase new homes andvehicles, but at the same time they have taken onmore debt. At this time, there does not appear to be a housing “bubble,” but should housing pricesfall, it would slow or stop the ability of home own-ers to continue taking equity out of their homes tofinance other consumer purchases. Debt service todisposable income is close to an all-time high. Thesetrends, along with high unemployment, cause con-cern for potential increases in delinquencies andbankruptcies. However, credit unions have moni-tored their underwriting standards to maintain ahigh quality of assets.

The continuing slow recovery has savers searchingfor safe investments while attempting to maintainsome reasonable rate of return. Asset growth isexpected to remain in the 10.0 to 12.0% range for2004, with consumer loans increasing at a 6.0 to8.0% pace. Some credit unions are experiencingdouble-digit loan growth, which will continue toput pressure on management to maintain compe-titive rates to attract new money and retain mem-ber deposits that are maturing. The strategy formembers continues to be short-term investmentsand maintaining increasing liquidity in regular


The strategy for members continues to beshort-term investments and maintainingincreasing liquidity in regular shares andmoney market accounts.


44

requirements for debit and credit cards, as well asATMs, require new policies, procedures, and train-ing, which continue to put pressure on return onassets. To ensure future growth potential somecredit unions are changing to community charteror expanding into underserved areas. This, alongwith new products such as small business loans,point to a strong future.

FINANCIAL MARKET TRENDS

For the first three quarters of 2003, the overallstock market has performed well. The Dow JonesIndustrial Average is up 11.0% since the beginningof the year. The NASDAQ Composite Index is up34.0% for the year. It appears that positive corpo-rate earnings reports, accompanied by a combina-tion of low interest rates, generous tax cuts, andrapid monetary growth, have provided an impetusto the rising market. However, there is concern thatthe overall stock market will not be able to continueits ascent, due to rising oil prices, the falling dollar,and a still-shaky economy.

Nonetheless, the securities industry is making acomeback. After two years of layoffs and lowerprofits, it appears that the industry will post recordprofits in 2003. The industry is earning greaterprofits from underwriting fees, commissions, andgains in brokerage firm’s own investment accounts.Furthermore, after several years of job cuts, broker-age firms are hiring more staff.

As of September 30, 2003, approximately 124,850individuals were licensed to conduct business as stockbrokers in Colorado. Of that number,

Financial Activititescontinued from page 43

shares and money market accounts. Any rapidmovement of short-term funds to other invest-ments, such as the stock market, could cause short-term liquidity concerns.

Consolidation of credit unions continues as newregulations and the high cost of technology make it difficult to keep up with compliance, especially in a small shop. Such issues as privacy, new security

COMMERCIAL BANK, SAVINGS AND LOAN, AND CREDIT UNION ACTIVITY IN COLORADO

1994-2004


45

approximately 13,800 stockbrokers actually residein the state. In addition, of the 2,386 brokeragefirms licensed to do business in Colorado, 90 haveoffices here. Moreover, approximately 5,630 in-vestment adviser representatives are licensed inColorado. This represents an increase of more than975 licensed investment adviser representativesover last year. The growth in the number oflicensed stockbrokers is expected to remain steadyin 2004.

Most of the state’s equity mutual funds mademoney for their shareholders in the third quarterof 2003. The average gains were between 1.0% and6.0%. However, nationally, there have been alle-gations regarding abuses in connection with latetrading and market timing of fund shares. At this point, it is not known what adverse impactthese allegations may have on Colorado-basedmutual funds.

During the past few years, the securities industryendured corporate scandals, accounting and auditfailures, excessive executive compensation, as wellas a bear market. Nonetheless, the industry hasemerged from these difficult times because it waswell capitalized. However, this positive trend willgo on only if there are positive corporate earningsreports and continued investor trust in the market.


FINANCE AND INSURANCE EMPLOYMENT1994-2004

(In Thousands)

46

Financial Activititescontinued from page 45

1990s, but tapered off in 1999. Although this sectorshows a CAGR of 2.8% between 1993 and 2003,employment has not grown since 2000. It is esti-mated that insurance companies in Colorado willtotal approximately 3,780 in 2003 and that averagewages will exceed $2.0 billion, or about $51,000 peremployee. Although the demand for insuranceproducts will continue to grow, no noticeableincrease in Colorado employment is forecast in this sector in 2003 and 2004.

The following statistics provided by the AmericanCouncil of Life Insurance help understand the im-pact that the insurance industry has on the U.S. andColorado economies. In 2002 Californians spentthe most on life insurance, around $216 billion,while residents of Wyoming spent approximately$2 billion (Coloradans spent about $30 billion).During 2002, the total life insurance in force rangefrom $2.5 trillion in New York to $25 billion inWyoming (Coloradans had about $315 billion in force).

Other key Colorado statistics for 2002 include:

• $300 billion in policy and contract dividendswere paid;

• Almost $700 million in death payments weremade;

• Premium receipts totaled approximately $9.8 bil-lion;

• $5.6 billion in mortgages were owned inColorado; and

• $859 million in real estate was owned by lifeinsurers in the state.

INSURANCE

The insurance industry is comprised of two cate-gories: life and health insurance and property andcasualty insurance. Nationally, about 2.2 millionpeople are employed in the industry. Technologyhas been a double-edged sword. While it has madeit possible for companies to provide more timelyservice and more creative products, it has also min-imized employment growth. Between 1993 and

2002, the industry increased at a CAGR of 0.7%.The number of insurance carriers in 2003 grewduring the 1990s, but has been on a steady declinesince 1999. Today, the number of insurance carriersis the same as the 1993 total.

Employment in the Colorado Insurance Sectorfollows a pattern similar to that of the nation. Theindustry grew rapidly during the first half of the

REAL ESTATE AND RENTAL AND LEASING EMPLOYMENT1994-2004

(In Thousands)



47

There is no news on the horizon that would indi-cate an increase in jobs for this sector in 2004. Infact, employment will decrease by 300 jobs in 2003.A continued slow decline is forecast, and the aver-age number of jobs will fall by an additional 200 in2004, to 31,500 jobs.

RENTAL AND LEASING

The Rental and Leasing Services Sector includes avariety of companies from Blockbuster Video toBudget Rent A Car to Mr. Neats Formalwear. Aftershowing declines for three consecutive years, from2000 to 2002, this sector will post an increase ofabout 300 jobs in 2003, a reflection of an economythat has turned around. This rate of growth isexpected to continue into 2004 as 700 jobs will be added. ✜

During 2003, the Colorado legislature eliminatedno-fault insurance. While this change is unlikely toimpact industry employment, it will have variouseffects on consumers. It is too early to identify howthis will impact the industry in 2004.

Real Estate and Rental and LeasingThe Real Estate and Rental and Leasing Sector isdivided into two subsectors. The sector is notexpected to experience any growth in 2003; how-ever, 500 jobs will be added in 2004.

REAL ESTATE

In 2003, it is unlikely that this category will exceedlast year’s total of 32,000 jobs. The nine-monthaverage for 2003 is 31,700, a modest decline of1.0% that will continue through year-end.

While it is true that significant additional space hasbeen brought to the market since 2001, the rate ofincrease has slowed dramatically to the point that ithas virtually stopped. Compounding this effect isthe compression caused by competition in the RealEstate Sector. Climbing vacancy rates have severelyaffected revenues for property owners. Lowdemand for space has increased the “cost” of secur-ing an occupant, and the resultant pressure on theother costs (property management, etc.) is severe.Efficiencies will have to be found and fewer peoplewill be asked to do more.


48

This NAICS sector includes: Professional, scientific, and technical services; private households; professional,scientific, and technical services; management of com-panies and enterprises; administrative and supportservices; waste management and remediation services;repair and maintenance; personal and laundry services;religious, grantmaking, civic, professional, and similarorganizations; and private households.

Professional and Business ServicesSupersectorThe three major sectors of this supersector are:1) Professional, Scientific, and Technical Services;2) Management of Companies and Enterprises;and 3) Administrative and Support and WasteManagement and Remediation Services.

PROFESSIONAL, SCIENTIFIC, AND TECHNICAL SERVICES

SECTOR

The major subsector classifications forProfessional, Scientific, and Technical Servicestracked by the Colorado Department of Labor andEmployment are legal services, engineering andarchitecture services, computer systems services,and other professional services. Other subsectorsincluded are the accounting services, scientificresearch services, advertising services, photographyservices, and veterinary services.

The businesses in this sector are the benefactors ofoutsourcing from other companies. The demandfor these services remains soft as the private andpublic sectors continue to delay meaningful capitalspending on new projects and only contract forthose services they deem absolutely necessary. One

trend that negatively affects the health of businessemployment is the local, state, and federal agenciesinternally performing many of these services untilthe economic conditions improve.

Legal services employment appears to have peakedin 2002. This subsector averaged 1.0% growth overthe last 10 years and is expected to show a slightdip in employment in 2003, about 400 jobs. The2003 legislative session provided a paradox of newstatutes from tort reforms on punitive and otherdamages to reinstating a tort system for auto insur-ance. These would seem to cancel each other; how-

ever, there should be a need for additional legalservices for businesses as the economy improves.Legal services employment is expected to remainflat in 2004.

After steady growth for many years, the architec-tural and engineering subsector experienced adecline in employment in 2002 and is projected tosuffer another 2.5% cutback in 2003, about 800jobs. Decreased state and local agency capital spend-ing on infrastructure has been the preferred andquick method to balance budgets. Future generalfund annual increases for state and local agencies

Professional and Business Services, and Other Services

PROFESSIONAL, SCIENTIFIC, AND TECHNICAL SERVICES SECTOR EMPLOYMENT1994-2004

(In Thousands)


49

are expected to be 3.0 to 4.0% per year for manyyears. The demand for public service, along withthe growth in congestion levels on many roads, willincrease faster than the anticipated tax revenues.The future viability of public agencies’ service andinfrastructure systems necessitate that existing rev-enue sources be protected and new innovativefunding and business sources be pursued.

Many visible building and transportation projectsmanaged to provide a certain level of employmentthrough construction engineering services. A largeloss of jobs due to the substantial completion ofthe T-REX project was realized early in 2003. Thecommencement of the design of many public andprivate projects was delayed until later in 2003.Both factors significantly contributed to first quar-ter 2003 recording the lowest level of employmentfor this subsector in many years.

Starting with the second quarter of 2003, employ-ment began steady growth. Some of this can beattributed to increasing demand for geotechnical,environmental, and surveying services that areused at the initiation of land development projects.Most of these projects are identified as being resi-dential and light commercial in nature. The designof new facilities and the expansion of existingplants is not expected to commence soon due toexisting excess plant capacity and the fact thatmany new plants are being built overseas for com-petitive product cost reasons. The employment lev-els of this subsector are expected to increase byabout 1,000 jobs in 2004.

One of the fastest growing areas in the 1990s wascomputer systems services. This subsector experi-enced several years of employment increases in the16.0 to 18.0% range, with growth peaking in 2000.

Employment for 2003 is anticipated to be about12,400 jobs lower than the 2000 employment level.To put this decrease in perspective, the number ofjobs in the subsector in 2003 is comparable to thenumber in 1998. The big question is when willbusinesses really be forced to replace their pre-Y2Kcomputer systems? The update of Microsoft’s latestWindows operating systems for computers andservers created a need to replace some older sys-tems. Although several high-end applications werealso updated in 2002, most businesses chose not toupgrade for reasons ranging from cost control to theupgrades’ lack of useful features. In 2004, operatingsystem and application software upgrades willagain be offered, but this time the upgrades will beforced on businesses by various methods. Theseupgrades are also expected to cause replacement of

the majority of the computer hardware purchasedfor the Y2K event due to their significant demandfor processing and larger application sizes. Thistimely turnover in computer systems is expected toresult in a minor increase in employment for thissubsector, which is hopeful news. After three years ofdecreases, employment in this subsector is pro-jected to increase by 1,000 jobs in 2004 as a resultof the expected increase in overall business activity.

Growth in other subsectors of the Professional andBusiness Services Sector will increase by about2,000 jobs in 2003. In 2004, the sector is expected toadd 4,300 jobs as the economy improves. Primaryareas of growth will be advertising, managementconsulting, and accounting services.


ADMINISTRATIVE AND SUPPORT SERVICES SECTOR EMPLOYMENT1994-2004

(In Thousands)


50

Professional and Business Services, and Other Servicescontinued from page 49

MANAGEMENT OF COMPANIES AND

ENTERPRISES SECTOR

The Management of Companies Sector employsabout 20,000 workers in approximately 1,000 estab-lishments. Three subsectors make up this sector.The largest is the managing offices subsector, whichaccounts for 91.5% of the total employment in thesector and 79.4% of the total establishments. About8.0% of employees are included in the secondsubsector, offices of other holding companies, andthe smallest subsector is offices of bank holdingcompanies. Examples of companies in this sectorinclude Qwest Services Corporation, MDCHoldings, MediaOne Group, and the AnschutzCorporation.

The sector has had positive growth since 1998 andis less susceptible to fluctuations in the economythan other sectors. It is expected to increase by 500jobs in 2003 and 600 jobs in 2004.

ADMINISTRATIVE AND SUPPORT AND WASTE

MANAGEMENT AND REMEDIATION SERVICES SECTOR

The major subsector classifications for the admin-istrative and support portion of this sector isemployment services, which includes placementagencies, temporary help services, and professionalemployer organizations; and services to buildingsand dwellings, which includes pest control, jani-torial services, landscaping services, and carpet

cleaning services. Other subsectors included aredocument preparation services, telephone call cen-ters, collection agencies, credit bureaus, travel agen-cies and tour operators, investigation and securityservices, convention and trade show organizers,solid and hazardous waste collection, landfilloperations, materials recovery facilities, and otherremediation services.

This sector’s rate of decline in average yearlyemployment has slowed through 2003, down 2,500jobs compared to a loss of 8,600 in 2002 and 7,400in 2001. The demand for these services that areprovided to businesses is expected to graduallyincrease through next year, reflecting the generalimprovement in business activity. The subsector isexpected to grow by 4,900 jobs in 2004.

A precipitous drop of almost 35.0% has been real-ized for the employment services subsector since itspeak in 2000, with the first quarter of 2003 seeingthe lowest employment levels since 1993. On theother hand, and even more dramatically, job recruit-ment agency employment levels have increasedalmost 25.0% in the first eight months of 2003.This boost of temporary and contract workers,coupled with weekly hour levels exceeding 40 perweek in the third quarter of 2003, are indicators ofincreasing business activity. Even with this dra-matic increase in employment in 2003, the averageyearly employment numbers for this subsector willdecrease from 2002, but should recover signifi-cantly in 2004.

The services to buildings and dwellings subsectorhas exhibited a steady average growth in employ-ment of 1.2% per year over the last 10 years.Starting in 2001, this subsector’s employment levelsplateaued and are expected to remain flat through

ADMINISTRATION AND SUPPORT AND WASTE MANAGEMENT SERVICES SECTOR EMPLOYMENT



51

2003. Most of these services are support for officebuildings that are currently in oversupply. With fewnew office buildings being designed and con-structed, this subsector is expected to increase atvery minimal levels for the next few years.

Other ServicesThe Other Services Supersector consists of threesectors: Repair and Maintenance, Personal andLaundry Services, and Membership Associations.

Over 23,000 employees work at about 4,500 dif-ferent establishments in the Repair and Mainte-nance Sector in Colorado at companies such asEnvirotest, Safelite Glass, and Midas International.During the 1990s the sector grew rapidly to meetthe demands of an increased population. As theeconomy tapered off, 100 jobs were added in2002.The sector is expected to decline by 200 jobsin 2003, but a 200 job gain is forecast for 2004 asthe economy turns around.

Personal and Laundry Services employs about21,000 workers at more than 3,200 establishments.The leading group in the sector is beauty salons,with about 7,500 workers and 1,300 establish-ments. A sampling of other services providedinclude funeral services, parking companies, one-hour photo processing shops, and barber shops,with much smaller employment bases.

Growth in this sector parallels the growth patternof the Repair and Maintenance Sector. Approxi-mately 200 jobs will be lost in 2003. With theimproving economy in 2004, growth in the sectorwill return with the addition of 200 jobs.

The largest sector, Religious, Grantmaking, Civic,Professional, and Similar Organizations, includessuch organizations as Focus on the Family, YMCA

of the Rockies, Highlands Ranch CommunityAssociation, Denver Dumb Friends League, and theAmerican Water Works Association.

This sector has been affected by population growthand the recent economic downturn, but has notbeen negatively impacted as much as other sectors.The sector is expected to increase by 700 jobs in2003 and 800 jobs in 2004.

The Forecast and ConclusionsThe 2003 employment levels of the Professionaland Business Services Supersector suffered com-pared to 2002 due to uncertainty caused by nega-tive national and international events. This resultedin lower business spending on the types of services

offered by this supersector. Meaningful capitalspending is still not taking place, and the questionof how long some of the equipment purchasedprior to Y2K will last is still relevant. At somepoint, businesses will have to replace antiquatedequipment. Business spending for capital equip-ment and related services is anticipated to gradu-ally increase in 2004. This growth could betempered if a significant business scandal occurs or if other international crises occur. In the back-ground, there may also be a lack of labor forcemobility caused by the constant increasing cost ofhealth insurance. This makes employers reluctantto hire and employees hesitant to leave currentemployment.


OTHER SERVICES EMPLOYMENT1994-2004

(In Thousands)


52

Two other significant emerging issues will impactthe manner in which professional and businessservices are provided. The first issue is of a short-term nature and related to the significant decreasein government spending to the private sector dur-ing these challenging economic times. With theanticipated increase in economic activity, therecovery of private sector employment is directlyrelated to the public sector resuming the outsourc-ing of services. If governments choose to initiallyhire internally as their tax receipts increase, this willput a damper on private sector services employ-ment growth.

The second issue is of a long-term nature andrelated to the service jobs that are moving overseas.Businesses are using the cheaper overseas labormarkets to stay price competitive. This has beenhappening for many years for manufacturinggoods; however, this is a relatively new trend forservices. The United States still has the best edu-cated workforce among the major economies,which drives our competitive global advantage forinvention and innovation. However, the number ofstudents graduating in the math and science fieldsis decreasing, while the number of students grad-uating in these fields overseas is increasing. India

and China now award more natural science andengineering degrees than the United States. Ourfocus on maintaining a better educated workforceis strongly needed in order to prevent the UnitedStates from being overtaken as skill and educationlevels rise elsewhere.

The practices of private sector law, banking, man-agement consulting, engineering, architecture, med-icine, telecommunications, and accounting wereonce tradition-bound “gentlemanly” businesses. Nomore. One by one, each of these professions hasentered the world of competition, technology, firmrestructuring, and even marketing. Firms are experi-menting with various restructuring options to gaingeographic coverage and broader market exposure.In addition, strategic alliances are formed for thepurpose of completing short-term projects. Thepush of technology has created on-line web-basedresearch and new billing practices. Competition isforcing firms to look very hard at overhead struc-ture, especially since most of it is labor driven. Thetradition of the single proprietor and small partner-ships is giving way to larger corporations due tomergers and acquisitions. The constant push is forcorporate profitability, downward pressures onsalaries, aggressive marketing, and cost cutting.

The forecast was developed using a much shortertrend analysis than previously used, due, in part, tothe realized uncertainties of switching over to thenew NAICS classifications and the recent nationaland international business and cultural events thatseem to have more significant effects on local busi-nesses’ spending decisions. The resulting forecastfor the Professional and Business ServicesSupersector in 2004 is growth of 4.2%, or 11,900jobs. Projected growth for the Other ServicesSupersector is 1,200 jobs in 2004. ✜

Professional and Business Services, and Other Servicescontinued from page 51

TOTAL PROFESSIONAL AND BUSINESS SERVICES SUPERSECTOR EMPLOYMENT1994-2004

(In Thousands)


53

This NAICS sector includes: educational services;ambulatory health care services; hospitals; nursing andresidential care facilities; and social assistance.

Overview

This NAICS supersector includes private sectoreducational and health-care companies and

organizations. From 1993 to 2002, it increased at acompound annual growth rate (CAGR) of 3.7%,with the education sector posting a CAGR of 5.8%and the much larger health-services sector showinga CAGR of 3.5%. Despite the recent recession,growth occurred in the industry in both 2002 and2003. Overall supersector employment grew by4,300 jobs, or 2.1%, in 2003 and is expected toincrease by 8,100 jobs, or 3.8%, in 2004.

Structure of the IndustryAbout 31.0% of the employees in the private Edu-cational Services Sector work for private colleges anduniversities, of which about 83.0% are employed atthe University of Denver, Regis University, ColoradoCollege, the University of Phoenix, Naropa Institute,and Colorado Christian University.

Other major components of the EducationalServices Sector include elementary and secondaryeducation and miscellaneous technical training.About 19.0% of the workers in this sector areemployed at private elementary and secondaryschools, while approximately 10.0% have jobs at miscellaneous technical training schools.Around 21.0% of the workers are employed in theareas of management training, sports instruction,

miscellaneous education, and fine arts. About19.0% of the workers in this sector are employed inprograms that range from computer or manage-ment to language schools and flight training.

The much larger Health-Care Sector is composedof four subsectors: ambulatory care, nursing, hos-pitals, and social assistance. The accompanyingtable displays ES202 and average wage, employ-ment, and establishment data from 2002 (the mostrecent year published), illustrating the compositionof the sector. To help understand how the recentchange from Standard Industrialization Classifi-cation codes to NAICS codes has redefined theindustry, another table provides subsector break-downs based on first quarter 2003 ES202 data.

About two-thirds of the employees in the largestsubsector, ambulatory care, work as doctors, den-tists, or in home health care. The remainder of thesubsector includes such medical services as special-ists, medical labs, blood banks, and dialysis centers.

Colorado is currently home to 80 private hospitals.About 90.0% of the employees in this subsectorwork at general medical or surgical hospitals.

Employment in the nursing care subsector isdominated by nursing care facilities, homes for theelderly, and residential mental and substance abusecare. About 28.0% of the companies and 58.0% ofthe employees work in nursing care facilities, whileabout 28.0% of the companies and 13.0% of theworkers are employed at homes for the elderlyindustry. About 10.0% of the employees work inthe area of mental care and substance abuse.


Educational and Health Services

HEALTH SERVICES EMPLOYMENT, WAGES, AND ESTABLISHMENTS(2002 ES202 DATA)


54

The final component of the health-care subsectoris social assistance, which is dominated by child daycare and other youth services, services for the eld-erly, and vocational rehabilitation services.

EDUCATION

Between 1993 and 2002, the private educationsubsector increased by a CAGR of approximately5.8%, or about 1,000 employees a year. Much ofthis growth has come in response to the generalexpansion of the economy and the need for con-tinuing education, and technical, computer, andmanagement training programs.

Decreases in higher education and public educa-tion budgets should strengthen the demand forservices provided by companies in this area duringthe next 18 months. About 800 jobs will be addedin the subsector in 2003 and approximately 1,200in 2004. Growth will occur primarily at the privateuniversities and in the areas of business support.

HEALTH-CARE AND SOCIAL ASSISTANCE SERVICES

The Colorado marketplace continues to be afflictedby double-digit health insurance premiumincreases, bringing economic hardships to bothemployers and employees. The National Federationof Independent Businesses reports that two-thirdsof Colorado small businesses saw premiumincreases of more than 20.0% in 2002 and arereporting another increase of over 20.0% in 2003.

Efforts by the State of Colorado to curtail theserising costs include offering Multiple EmployerWelfare Association participation, introducingopportunities to rate band premiums under certain

Educational and Health Servicescontinued from page 53

ESTIMATED EMPLOYMENT AND ESTABLISHMENTSAMBULATORY AND SOCIAL ASSISTANCE

conditions, and allowing the sale of health insur-ance policies that exempt certain mandates, such asmammograms and prostate screenings. Employerstrategies include decreasing coverage (16.0%),increasing deductibles (19.0%), and increasingcopayments (38.0%) (Denver Business Journal,August 2002).

Employment in the health industry continues to be limited by the supply side: there is a nationaldesperation for health-care workers, particularlynurses. For this reason, demand is expected toremain strong but only modest growth in healthemployment overall is forecast. With the con-struction of five new hospitals in the Denver


55

metropolitan area, it is reasonable to expect someinflux of new employees as these institutions offerattractive signing bonuses and options to encour-age relocation. However, the “rotation” of medicalemployees (the movement of local labor from oneinstitution to another) must be considered, whichwill not result in an overall increase in totalemployment in this sector. Rather, we expect thehiring limitations to shift from one institution toanother as they compete for available labor. It isnot fair to assume that all new hospitals will havethe ability to move labor into their institutionswithout significant financial incentives and respon-siveness to potential employee needs. The use oftemporary and contract labor can be expected tofurther shift costs upward. In a Chicago suburb,signing bonuses of $30,000 affect the flux withinthat particular market, and it may be reasonable toassume that regional and rural markets’ ability tocompete with such incentives will limit the abilityto recruit and retain labor. One area of promise is a

new initiative of the Robert Woods JohnsonFoundation that recruits students interested inhealth-care professions from rural areas who aremore likely to return to these areas after gradua-tion. Although the need for additional qualifiedlabor is apparent, the capacity of the education sys-tem in Colorado has not been altered to createadditional influx into the workforce.

The capital that hospitals have available to pay foradditional labor may be limited by a variety ofmarket factors, including the cash flow and finan-cial liabilities within a particular institution. Forinstance, a community hospital that provides agreat deal of charity care and is struggling with baddebt from clients may have more difficulty freeingup capital that would allow it to compete in thecontest of enticing new labor. Nationally, the num-ber of uninsured Americans is expected to increasethe amount of bad debt in hospitals. In 2003,staffing limitations have forced some hospitals togo on divert status.

A factor that may impact revenue for certaininstitutions is “boutique hospitals.” Boutique, orspecialty, hospitals are popping up statewide andconcentrating their services on one or two particu-lar procedures that are quite profitable because ofthe quantity and scale of services. As full service,general hospitals lose out on these profitable pro-cedures, they no longer have the ability to use theprofit from particular lucrative procedures to offsetthe care for which they receive inadequate compen-sation. This situation will further limit communityhospitals’ ability to be financially viable.

2002 ESTIMATED SOCIAL ASSISTANCE EMPLOYMENT AND ESTABLISHMENTS

COLORADO EDUCATIONAL SERVICESEMPLOYMENT




56

Educational and Health Servicescontinued from page 55

Organizations that are able to adapt and use newerinformation technologies to streamline theirprocesses will begin to realize economic efficienciesover their competitors. The costs associated withupdating the health-care information infrastruc-ture are significant, but will pay for themselves overtime. The initial start-up funding remains the diffi-culty. Health care will continue to build itself as anindustry that depends on information from the useof electronic medical records and telemedicine,linking physicians and patients across the state.Capitalizing on technologies such as telemedicine

will allow rural communities to benefit fromadvances in medicine that are often initially limitedto urban centers.

The health-care industry hopes to benefit fromefforts to educate consumers about the true costsof health-care procedures. Many interests claimthat consumers have too long been insulated fromthe actual costs of visits, procedures, and medi-cines. With the newfound interest in consumer-driven health care (models that transfer moreresponsibility and cost to patients), it is fair to becautiously optimistic that individuals will become

more thoughtful and particular before usinghealth-care services. Ideally, such a model will limitunnecessary trips to the doctor, but others haveargued these increased costs pushed onto con-sumers may result in a decision to forego neededmedical treatment, which can ultimately meangreater costs to the health-care system down theroad. In addition to cost information, all healthplans can be expected to provide greater access to quality metrics, outcomes of care, and oppor-tunities for patients to share in decisions with their physicians.

Colorado has some true opportunities for growthin the health-care arena with the continued expan-sions at the Fitzsimons campus. The campus hasbeen designed to allow for industry growth andcollaboration and is actively recruiting new organi-zations. One Pfizer has announced it will bring anew regional center to Colorado in the summer of 2004, and many hope that this major nationalpresence will encourage additional movementfrom smaller, yet significant, players to contributeto the Colorado economy. With the presence andsupport of the University of Colorado educationalsystem, this industrial project is expected to attractboth skilled and highly educated laborers.

HEALTH-CARE EMPLOYMENT

Between 1993 and 2002, Colorado populationincreased at a CAGR of 2.5%. Growth in health-care employment increased at a CAGR of 3.5%,with ambulatory health care increasing at a CAGRof 3.1% and hospital employment growing at a rateof 4.1%. The smaller subsectors also enjoyed growth

HEALTH-CARE SERVICES EMPLOYMENT1994-2004

(In Thousands)


57

greater than that of the state population as nursingcare employment increased by a CAGR of 2.9%and social assistance employment grew by 4.0%.

In 2003, health-care employment will increase by1.9%, or 3,400 jobs. Seven hundred jobs will beadded in ambulatory care and 1,100 jobs added inhospitals. Nursing care employment is expected tofinish 2003 up 700 jobs, while social assistance willincrease by 900 employees.

Growth is expected to continue at a much fasterrate, 3.7%, in 2004, with an increase of 6,900 jobs.

The supply of physicians, dentists, and othertrained employees in the ambulatory health-caresubsector will not be able to meet demand, andemployment will rise 3.1%, or 2,300 employees.With the addition of several new hospitals, em-ployment in the hospital subsector will increase by 2,200 jobs. While this subsector faces the samesupply and demand issues that the ambulatorysubsector confronts, growth will occur as a result of increases in hospital support staff. Gains in thenursing care subsector will also be constrained bythe supply of trained employees; however, the

subsector is expected to grow by 3.7%, or 1,300jobs. Within the nursing home and assisted livingindustry, construction of new facilities is expectedto be flat. However, occupancy rates remain veryhigh, in the 95.0% range. In the past few months,staff vacancy rates have improved from 18.0% to15.0%. Finally, social assistance employment willrise by 1,000 jobs. While there is a definite need forthe services provided in this subsector, it is felt thatthe recent downturn has reduced the resourcesavailable to these organizations. ✜

COLORADO EDUCATION AND HEALTH-CARE SERVICES EMPLOYMENT1994-2004

(In Thousands)


58

LEISURE AND HOSPITALITY EMPLOYMENT1994-2004

(In Thousands)

This NAICS sector includes: Performing arts, spectatorsports, and related industries; museums, historical sites,and similar institutions; amusement, gambling, andrecreation industries; accommodation; and food servicesand drinking places.

Between 1993 and 2002, employment in theLeisure and Hospitality Supersector increased

at a compound annual growth rate (CAGR) of2.9%. Food Services was the fastest growing area,increasing at a CAGR of 3.3%. Arts, Entertainment,and Recreation grew at a CAGR of 3.1%, andAccommodation increased at a CAGR of 1.5%.

In 2003, total employment in Leisure andHospitality will decrease by 1.2%, or 3,000 jobs.Job increases of 1,800 in Accommodations and 400in Arts, Entertainment, and Recreation will be off-set by the 5,200 jobs lost in Food Services.

In 2004, the Leisure and Hospitality Supersector isexpected to bounce back, with employment growthof 3.4%, or 8,200 jobs. The Food Services area isexpected to post the largest job gains, roughly5,000. In addition, both Accommodation and Arts,Entertainment, and Recreation are forecasted togrow by 1,600 jobs.

Data presented at the Travel Industry Associationof America’s (TIA) Travel Marketing OutlookForum in Austin, Texas, in late October 2003 indi-cate that the travel outlook for 2004 is cautiouslyoptimistic. After several years of little travel volumegrowth, combined with significantly lower travelspending, it appears that things are improving.According to TIA’s annual travel forecast, overalltraveler spending by domestic and international

visitors is predicted to increase 4.4% in 2004, upfrom $544 billion in 2003. However, it will not beuntil 2005 that the level of spending (forecast toreach $594 billion) will surpass the record set in 2000.

Domestic leisure travel has slowly but steadilyincreased over the years, despite the aftermath ofSeptember 11, the lagging economy, the war inIraq, and severe acute respiratory syndrome(SARS). TIA is forecasting U.S. leisure travel togrow 3.2% in 2004, up from a 2.8% gain in 2003.

Domestic leisure travel is predicted to increaseagain in 2005 by approximately 2.0%. Leisure travelhas been and will continue to be the one brightspot in the travel picture. Last-minute planningand booking will remain the norm.

Two of the hardest hit segments of the travel indus-try, domestic business travel and internationalinbound travel to the United States, will once againsee year-over-year declines in 2003 of 3.7% and4.0%, respectively. However, the outlooks for bothsegments are more positive for 2004 and 2005.

Leisure and Hospitality


59


For the first time since 1999, the number of busi-ness trips U.S. residents will take in 2004 is expectedto rise, to 122 million trips. This is a 4.2% increaseover 2003. In 2005, business travel is anticipated toincrease 3.5%, to nearly 127 million trips.

After falling steadily for three years, internationalinbound arrivals to the United States are forecastedto increase 5.0% annually in both 2004 and 2005.This translates to more than 42 million interna-tional arrivals in 2004 and over 44 million the fol-lowing year. These numbers, however, are wellbelow the high of 51 million arrivals recorded in2000. International traveler spending in the UnitedStates is anticipated to rise 5.5% in 2004, to morethan $69 billion. Another increase—8.0%—is

expected in 2005, to $75 billion. Once again, thesespending levels are well below the $82 billion spentby international travelers in 2000.

National trends in consumer travel behavior showgreater interest in highway travel, in-state travel,and short getaways (three or fewer nights). Visitingsmall towns and rural areas, reconnecting with theimportant things and people in one’s life, andeconomizing are also trends. Less interest has beenshown in travel outside the United States, air travel,visits to places that draw large crowds, and travel tomajor cities.

Colorado’s tourism economy has reflected thesetrends and will continue to mirror them in thefuture. Overall, we anticipate that Colorado’s travel,

tourism, outdoor recreation, leisure, and hospital-ity economy will grow by 4.0% in 2004, withslower growth during the first half of the year.Stronger growth will occur in the second half. Thefollowing paragraphs provide specific forecasts forColorado by subsectors.

Business and Convention TravelThe future outlook for meetings and conventionsin Denver and Colorado is very promising. TheColorado Convention Center Expansion will becompleted in December 2004. The following yearthe 1,100-room Hyatt Convention Center Hotelwill open. Future convention bookings for Denverare double compared to past bookings in the origi-nal center. However, the increase in meetings andcitywide conventions bookings in 2004 will be onlyin the 2.0 to 3.0% range. Construction at the con-vention center will continue to be a limiting factorthroughout the year. There are 26 national andregional conventions scheduled for Denver in 2004.Business travel and corporate meetings are expectedto increase 4.5% in 2004 as the economy rebounds.Increased business travel, combined with a solidconvention year, will allow downtown Denver hotelsto increase occupancy and the average daily rate.

The expansion of low-cost airlines serving DenverInternational Airport (DIA) will cause the numberof air passengers to grow 6.0% in 2004 in bothbusiness and leisure travel. The growth will beprimarily guaranteed by Frontier Airlines’ andUnited’s new low-cost carrier Ted.

MEETINGS AND CONVENTIONS BOOKED BY THE DENVER METRO CONVENTION VISITORS BUREAU

1998-2004


60

Within Colorado, every dollar spent in restaurantsgenerates an additional $1.16 in sales for otherindustries in the state, according to the U.S.Department of Commerce. This encompasses awide variety of industries, including agriculture,construction, manufacturing, transportation, realestate, financial services, and wholesale trade. Infact, essentially any industry that is associated withthe operation of a restaurant enjoys increases insales when the restaurant industry grows.

The restaurant and food-service industry is thelargest private sector employer in Colorado.According to the National Restaurant Association,the Colorado restaurant and food-service industryemployed 214,700 individuals in 2002. This repre-sents nearly 10.0% of the total employment base inColorado. By 2012, Colorado’s restaurant industryis projected to employ 259,500 individuals—anincrease of 20.9% (or 44,800 jobs) over the 2002level. The 214,700 employment figure includesemployment in all eating and drinking place occu-pations, plus employment in food-service positionsthat are not located in eating and drinking places.

Outdoor RecreationMuch of the leisure travel to Colorado is based onthe state’s outdoor recreation attractions and parks.Among the numerous outdoor recreation attrac-tions available to Colorado tourists is a remarkablediversity of national and state parks. The spectrumof parks administered by the National Park Serviceextends from premier national parks, such asRocky Mountain National Park and Mesa VerdeNational Park, to historical sites such as Bent’s Old

The future for meetings and convention businessin Colorado is very bright. New or expanded meet-ing facilities planned for Vail, the Broadmoor inColorado Springs, and Pueblo, along with therecent expansion of the Keystone ConferenceCenter, will offer more opportunities for groups tomeet in Colorado.

AccommodationsWith strong dependence on fly-in traffic, Coloradoaccommodations lagged national data by 0.3 occu-pancy points in 2001 and 1.5 occupancy points in2002. Year-to-date data for 2003 indicate the state islagging 2002 by 1.9 points, leading to a year-endoccupancy projection of approximately 56.0%.On the positive side, data since July have stabilized

compared to the same months in 2002, indicatingthat the worst of the lodging recession may be past.

While average rates have been well managed, andhave actually increased on a year-to-date basis,declining occupancies will result in falling hotelrevenues for the fourth consecutive year. Althoughthe historic numbers are discouraging, stabilizationof rates and occupancies since summer and thetendency of Colorado’s lodging industry to trail thenation both entering and exiting a recession, leadus to believe that better times may be ahead for thestate’s lodging industry.

Colorado Restaurant Industry OutlookAmidst a backdrop of economic and populationgrowth, Colorado is expected to rank fourth in thenation in terms of restaurant sales growth in 2004.Colorado’s restaurants are projected to registersales of more than $7 billion in 2004—a robust6.1% increase over the 2003 level. The $7 billion insales will generate nearly $400 million in state andlocal taxes, while employing 166,000 workers in9,500 restaurant establishments.

A popular perception is that the restaurant indus-try is a collection of low-wage jobs, with a nominalimpact on a state’s economy other than providingstudents with a part-time job in the summer orduring school. However, a look inside the numbersreveals a completely different story. The restaurantindustry is not only an important source of job andtax revenue in the state; it is important to the suc-cess of many other industries in Colorado.

Leisure and Hospitalitycontinued from page 59

SUMMARY OF OCCUPANCY AND AVERAGEDAILY ROOM RATES

1997-2003


61

Fort. In addition, the extensive state park systemoffers high-quality recreation attractions and facili-ties to both tourists and residents throughout thestate of Colorado.

In recent years outdoor recreation has beenimpacted by local problems, as well as nationaltrends and a lack of international visitors. Droughtconditions, wildfires, and camping restrictions cre-ated dramatic declines at many of the state’s parksand outdoor recreation areas in 2002. As with othersectors, 2003 saw some recovery, but visits are stillbelow previous peaks. It is estimated that both stateand national parks in Colorado will recordincreased visitation in 2004. Visitation is expectedto increase 4.0 to 5.0% over 2003 levels. National

park visitation will rebound from recent declines,and state park visits will continue their long-termgrowth trend.

A variety of survey research used to produce the2004 State Comprehensive Outdoor Recreation Planvalidates the premise that Colorado is an increas-ingly attractive retirement location. Survey resultsdocumented that Colorado’s population is aging,that Colorado residents’ participation in outdoorrecreation activities far exceeds national averages,and that retirees are seeking locations near federalrecreation lands. Thoughtful recognition of theeconomic value of an older population shouldresult in several opportunities for the tourismindustry. Potential benefits of these consumer pref-

erences are recreation users who have more leisuretime and more inclination to spend disposableincome on recreation attractions, consumers whouse facilities year-round, and persons who aremore inclined to support tax initiatives for localinfrastructure that enhance recreational opportu-nities. Consistent voter support to fund open-spaceand wildlife initiatives provide ample evidence ofthis last benefit. Numerical impacts to be realizedfrom targeting this population group will beincreased visitation frequency, expansion oftourism seasons, increased demand for bed-and-breakfast and other small scale “weekend escape”facilities, and revenues derived from both personalconsumption expenditures and tax revenues.


COLORADO PARKS VISITS1995-2004

(In Thousands)



62

The previously mentioned 2004 State Compre-hensive Outdoor Recreation Plan should be mustreading for all tourism professionals as it presents a vision for Colorado’s outdoor recreation futureand discusses the nexus of tourism and outdoorrecreation in Colorado. The full document can bedownloaded on-line at <www.parks.state.co.us>. Alimited number of CDs are available through theColorado State Parks office at 1313 Sherman Street,Room 618, Denver, CO 80203, or 303-866-3437.

Downhill SkiingColorado continues to be the nation’s premierwinter ski destination, with 34,568 acres of skiing,296 lifts, and 2,062 trails at 24 resorts. During the2002-03 season Colorado ski resorts enjoyed goodsnowfall and overcame the challenges of a laggingeconomy, war in Iraq, safety concerns, and a trou-bled airline industry to record 11.6 million skiervisits for a 4.3% increase over the 2001-02 seasonand 198,958 visits above the five-year average.

On the basis of a recovering economy, season passsales, strong early reservations, a recovering inter-

national market, and a stronger Canadian dollar,we estimate that skier visits will continue to growin the 2003-04 season. If Colorado has abundantsnowfall, a new record could be set.

As in the past several years, visitation will be drivenby the heavily discounted season passes sold by theFront Range destination resorts, which meansspending levels will not be as high as when des-tination skiers accounted for a larger market shareof visitors.

The 2003-04 ski season visitation level will behelped by the huge expansion of terrain parks and

SKI LIFT TICKETS1993-94 to 2003-04

(In Millions)

Leisure and Hospitalitycontinued from page 61

COLORADO CASINOS1994-2004


63

other improvements at the ski resorts. The follow-ing events will also help bolster ski visits:

• Men’s World Cup Downhill and Super G Races atBeaver Creek

• 13th Annual SAAB U.S. Extreme FreeskiingChampionships and the 10th Anniversary U.S.Extreme Boarderfest at Crested Butte

• ESPN Winter X Games VIII at Aspen/Snowmass

• U.S. Freeskiing Open at Vail

• Chevy Truck NorAm Superseries and 29thAnnual Wells Fargo Bank Cup at Winter Park

• 30th Annual Bud Light Cowboy Downhill atSteamboat

GamingColorado’s casino gaming industry has enjoyeddramatic growth in the past, registering double-digit or healthy single-digit increases each year.However, adjusted gross proceeds throughSeptember 2003 show a sluggish pace, decreasing3.3%, to $532.3 million. While 2003 performance isexpected to be flat, the casino industry willrebound in 2004 and record a 5.0% increase.

Blackhawk, which dominates the casino market,continues to grow. Cripple Creek is recording slow growth, and Central City continues to losemarket share.

Air TravelThe leisure and hospitality sector depends heavilyon air travel. For the first time since 9/11, there issome encouraging news on the air outlook. Denverpassenger traffic surged 9.3% in September 2003for the highest monthly gain since January 2003.The improving economy and more competitionwere the keys to passenger growth. A total of2,960,096 travelers passed through DIA duringSeptember compared with 2,709,400 in the samemonth in 2002. The September figure brought thetotal for the first three quarters of 2003 to28,126,571, an increase of 3.7% over the first ninemonths of 2002.

Other good news on the air front is that seven newairlines began using DIA in the past two years.United will launch its new low-cost carrier Ted,with flights beginning February 12, 2004. InNovember, Denver Mayor Hickenlooperannounced a settlement with United Airlines thatwill provide Frontier with gates needed for expan-sion. This will accommodate Frontier’s anticipatedgrowth over the next several years. ✜

DENVER INTERNATIONAL AIRPORT PASSENGERS1997-2004

(In Millions)


64

This NAICS sector includes: executive, legislative, andother general government support; justice, public order,and safety activities; administration of human resourceprograms; administration of environmental quality pro-grams; administration of housing programs, urban plan-ning, and community development; administration ofeconomic programs; space research and technology;and national security and international affairs.

The Government Supersector includes federalcivilian, state, and local government employ-

ment in the state of Colorado. For the past fiveyears (1997 to 2002), this supersector has grown ata compound annual growth rate (CAGR) of 2.6%.In 2002, employment in the Government Super-sector in Colorado increased 4.2%, which was con-siderably higher than the national employmentincrease of only 1.8%. Employment growth in thesupersector is projected to decrease by 1.2% in 2003.In 2004, the forecast calls for growth to declineslightly, falling by 0.5%. Employment in all subsec-tors is expected to decrease in both 2003 and 2004.

Federal GovernmentOverall, the level of federal government employ-ment has decreased slightly over the past five years,declining by 0.5%. This trend was interrupted due tothe 2000 Census as federal government employmentincreased by 1.3%, but then dropped to historiclows the following year. The events of September 11temporarily reversed the downward trend for 2002.Federal government employment posted a 0.2%increase in Colorado and 0.1% nationally with theadvent of the homeland security initiatives. Nation-ally, federal government employment is expected to

Government

post similar gains in 2003, while in Colorado theforecast is for a 0.6% decline, or 300 jobs.

Because of the war in Iraq, federal governmentexpenditures are growing very rapidly. Federaldefense expenditures are forecast to increase almost10.0% this year and will rise another 5.0% in 2004.Federal spending related to nondefense projectswill also climb in 2003 and 2004 but at about halfthe rate posted for defense expenditures. Althoughdefense spending will not have a huge impact onthe Colorado economy, the regional impact of this

spending will help maintain federal governmentemployment levels. Federal employment will postonly minimal losses due to an employment freezein the first half of 2003 and retirees not beingreplaced. National U.S. Postal Service employmentwill fall by almost 4.0% in 2003, but in Coloradoemployment is expected to remain steady due tothe continuation of population expansions in thesurrounding areas of metro Denver and the ruralareas. In 2004, the Federal Sector is expected todrop by 0.8%, or 500 jobs.

GOVERNMENT EMPLOYMENT IN COLORADO1994-2004

(In Thousands)


65

State GovernmentOver the last five years, state government employ-ment has grown at a CAGR of 1.9%. In 2002, thesector increased by 2.4%, significantly above thesubsector average. State education accounts forapproximately 61.0% of state government employ-ment. This subsector posted a CAGR of 1.4% overthe past five years and showed an increase of 2.7%in 2002. These trends for state governmentemployment will dramatically reverse in 2003 asdeclines in state revenues cause state governmentemployment and state education to contract by1.8% and 1.7%, respectively. The forecast calls forstate employment to remain virtually flat in 2004,while state education falls by another 0.6%.

This decrease in state employment can be attrib-uted, in part, to state employees taking advantageof the relatively low rate for purchasing years toadd to their pension. Record numbers of stateemployees have been buying years because theprice of purchasing them jumped in November2003. This has led to a higher than average numberof retirees in 2002 and 2003. With record numbersof state retirees and a voluntary hiring freeze inplace, many of the vacancies will remain open. Thisprocess has also mitigated the need for layoffs insome state departments. The attrition seen at thestate government level in 2003 is due in somedegree to salary freezes, along with increasedhealth-care costs passed along to employees. As thestate economy shows signs of life, some state staffare jumping into the private sector.

The contraction in state government employmentwill occur primarily because of the steep decline inthe state’s economy. The recent downturn has beenexacerbated by losses in the stock market, whichsignificantly reduced sales tax and capital gainsincome tax receipts. Many of Colorado’s majorindustries, from manufacturing to tourism, havesuffered in 2002 and 2003, and there is littleimprovement expected in 2004. Other than theGrand Junction area, tourism is off significantlythroughout the state due to several factors. Therewere some signs of recovery in 2003, with growthin airport traffic at Denver International Airport.According to the Office of State Planning andBudgeting, the state’s general fund budget hasdecreased by 4.2% ($236 million) in state fiscalyear 2002-03, but will increase slightly by 2.2%($122 million) in the following fiscal year. As anexample, collectively, the University of Colorado isexpected to lose $79 million in funding between2003 and 2004. The cuts have already resulted inthe dissolution of academic programs and researchcenters and almost 200 positions. The university isexpected to cut up to 300 more positions in 2004.

Local GovernmentLocal government is comprised of municipalities,counties, school districts, and special districts.From 1997 through 2002 local governmentemployment increased by almost 20.0%, a CAGRof 3.7%. During the same period, the annual aver-age growth in local educational services, whichaccounts for more than 51.0% of local governmentemployment, increased by a slightly slower rate of3.2%. In 2002, local government grew by 6.0%,

while local education posted a 5.1% gain. The 2003estimate is for local government to fall by 1.1%, or2,500 jobs, while the 2004 forecast calls for a 0.4%decrease, or 800 jobs. The local education subsectorwill experience similar rates of decline.

Nationally, reports indicate that since 1977 state percapita funding on higher education has decreasedby 17.0%. As a percentage of the Colorado state

INDEX OF GOVERNMENT EMPLOYMENT IN COLORADO

1994-2004(Base Year: 1994=100)



66

Governmentcontinued from page 65

general fund, public higher education funding hasgone from 13.3% of the fund in state fiscal year2001-2002 appropriations to 10.6% in 2003-2004.In the same time period, Colorado resident studentfull-time equivalent (FTE) has risen significantly,from 123,383 to 135,392. Out-of-state FTE hasincreased slightly, from 22,152 to 22,809. The num-ber of Colorado high school graduates in Coloradowill continue to rise through 2006 and 2007, reach-ing an all-time high estimated at 47,856.

The outlook for 2004 and 2005 is indicated by thegovernor’s proposed budget, which will increasestate spending by 5.8% and provide a $16.3 millionhike in financial aid to help students attending stateinstitutions of higher education. The increase tothe state budget will assist higher education inpreparing for the expected increase in the Coloradoresident student population. The role higher edu-cation plays in Colorado’s rural areas is substan-tially bigger than in the metro regions. Ruralcommunities such as Durango, Alamosa, andGunnison will see a proportionately higher impactfrom an increase in funding to higher educationbecause of the important role higher educationplays in these communities.

In the metro area, local school districts are facingbudget concerns, partially due to a decrease inenrollment. Boulder County closed more thanthree schools this spring because the buildings didnot accommodate enough students to make opera-tions worthwhile. Jefferson County is also strug-gling with attracting enough student enrollments.However, the Cherry Creek School District wantsto build four elementary schools and two middleschools with the passing of a $14 million mill levyincrease. It has not been stated whether plans arefor 2004 or 2005. One question remains: Whateffect will the voucher system have on local schooldistricts’ employment levels?

Many city budgets and bureaucracy have grownover the last decade; however, they have not keptpace with the population. Over the past few years,local communities have been negatively impactedby a number of factors. The continuing Coloradodrought, summer wildfires, and a decline intourism have all contributed to a weakening ofmany local economies. The effects of the TABORamendment that limits the amount of revenues thetaxing authority can spend have restricted growthin government spending. As a government’s rev-

enues decline (as a result of lower sales tax revenue,for example), the amount of revenues that can bespent in the following years are bound by a lowerspending level. Local government budgets were cutin 2003, and will see no growth in 2004 due to theeconomic slowdown and the lagging recovery. Theimpact of this will lower government’s ability tomaintain revenues for years to come. That is to say,the base from which allowable growth is calculatedaccording to the TABOR amendment has declined,thereby reducing the government’s future spendingpotential and ability to proactively rebound fromthe poor economic state of today.

Local government across the state has curtailedlocal services and capital projects in 2003, whichwill continue into next year. Budget cutbacks haverequired local governments to leave vacanciesunfilled and in some cases, eliminate positions. Inalmost every municipality, a reduction in budgetfinds cuts to the police force and a lack of salaryincreases and bonuses for city employees. It willtake several years for these local economies torebound. ✜


67

International Trade

Prospects for Growth in 2004

The world economy is showing signs of recov-ery, but the pace and strength of the recovery

is still unclear. After three lean years, the globaleconomy appears to be ready for growth, but itmay be uneven. The recent collapse of the WorldTrade Organization (WTO) trade talks in Mexicocould foretell a slowdown.

The United States, under the impetus of extremepro-growth monetary and fiscal policies, seems tobe driving the world recovery, but the dual problemof a trade deficit and a mounting budget deficitcould eventually cause trouble. Large trade andpayments imbalances can lead to exchange ratevolatility, ultimately resulting in a further significantdrop in the value of the U.S. dollar. The probabledepreciation of the U.S. dollar against other majorcurrencies is positive for U.S. manufacturers andexporters, but negative for exporters in Europe,Canada, and other industrial regions. Dollar depre-ciation does nothing, however, to realign the tradebalance with China as long as the yuan is pegged tothe U.S. dollar. While the Chinese government willprobably endorse some moderate currency realign-ment over the next year, it will do little to changethe shift in the economic landscape that now soheavily favors China.

The U.S. trade deficit should continue to reachnear record levels through 2004, partly due to thehigh cost of energy imports. An additional causefor the trade imbalance is America’s increasingdemand for consumer and industrial goods manu-factured primarily in Asia. Similarly, some services

that can be accessed electronically are being out-sourced to other low-wage countries such as India.

Europe is still struggling to turn its economyaround, but should see modest growth in 2004.The slow economy has reduced European profitsand negatively affected business confidence, mak-ing firms cut capital spending and employment,which will prolong Europe’s recovery. The strongereuro in 2003 hurt European manufacturers, therebyeliminating the hopes of an export-led recovery.

Growth remains weak in the Americas, with prob-lems particularly critical in Argentina, Venezuela,and Colombia. Throughout the region, borrowingcosts are still very high, fiscal imbalances in thelargest countries have not been structurallyreduced, and inflation remains problematic. Braziland Chile are the exceptions. Economic and fiscalinitiatives in Brazil and Chile have helped bolsteractivity and boost investor confidence.

The severe acute respiratory syndrome (SARS) out-break in 2003 took a toll on Asian economic activity.The hardest hit economies were Hong Kong andSingapore, both of which depend heavily on traveland tourism. Emergency spending packages arebeing implemented throughout the region to coun-teract the slump in consumer spending. In contrast,industrial activity and manufacturing remainsstrong as Asian exporters continue to gain globalmarket share. China, which suffered the most casu-alties from the SARS outbreak, has been the eco-nomically least affected in the region. Its economyhas been growing rapidly, and is showing no signs ofslowing. Japan, too, was barely touched by the SARS

epidemic. Many positive growth indicators are com-ing from Japan, such as increased capital spendingand rebounding investment; however, Japanesebanks continue to have problems with nonperform-ing loans. This keeps many insolvent companiesalive, which acts as a drag on the economy.

Because of projected uneven growth in the globaleconomy and the instability of the U.S. dollar, theInternational Trade Committee is guardedly opti-mistic regarding Colorado’s export outlook for2004. The committee is forecasting a 2003 year-endincrease of approximately 4.5%, which reflects animprovement in exports in the last three months of2003 compared to 2002. Additionally, the commit-tee is forecasting 5.0% growth in exports fromColorado in 2004.

VALUE OF COLORADO EXPORTSFISCAL YEARS 1999-2004




68

Impact of Free Trade AgreementsDespite the collapse of the WTO trade talks inSeptember 2003, the U.S. government is aggres-sively pursuing the opening of foreign markets forU.S. goods and services by negotiating bilateral andregional free trade agreements. In July Congressapproved free trade agreements with Singaporeand Chile, Colorado’s 7th and 35th largest exportmarkets, respectively. Other free trade agreementsthat are targeted for completion by the end of 2003are being negotiated with Australia, Morocco,CAFTA (Costa Rica, El Salvador, Guatemala,Honduras, and Nicaragua), and the South AfricanCustoms Union (South Africa, Botswana, Lesotho,Namibia, and Swaziland). The positive impact ofthe North American Free Trade Agreement(NAFTA) on the export of manufactured goodsand agricultural products from Colorado toMexico and Canada illustrates how these agree-ments can create new opportunities for Coloradobusinesses in the global marketplace.

Manufactured ExportsColorado companies shipped $3.3 billion in manufactured, agricultural, and mineral productsthrough July 2003, the most recent month available.This figure was 3.0% higher than the $3.2 billionshipped through July 2002, and continues a gradualturn around in Colorado exports. At $5.5 billion,annual 2002 Colorado exports finished 10.0%below the 2001 levels.

MAJOR EXPORT MARKETS FOR COLORADO IN 2003 In 2003, the largest region for Colorado exportswas Asia, at $1.3 billion, up 9.0% compared to 2002figures through July. Exports to Asia now make up39.0% of all foreign sales. Exports to NAFTA part-ners Canada and Mexico also continued to grow in2003, increasing 5.0% from the previous period, to$1.1 billion. These two countries form another

32.0% of Colorado’s foreign sales (data throughJuly). Exports to Europe, down 6.0% to $796 millioncompared to July 2002, make up 24.0% of Colo-rado’s total foreign sales. The remaining areas wereAustralia and Oceania, and Latin America (withoutMexico), each forming another 2.0% of Coloradoexports, and the Middle East and Africa, togetherforming 1.4% of the total (data through July).

MAJOR DESTINATIONS FOR COLORADO EXPORTS OFMANUFACTURED GOODS, MINERALS, AND AGRICULTURAL PRODUCTS


International Tradecontinued from page 67


69


The state’s largest export market through July con-tinues to be Canada at $776 million, followed byMexico at $291 million and Korea at $249 million.Japan’s continued persistent economic troubles, aswell as Japanese companies’ shift to manufacturingin China and elsewhere in Asia, likely contributedto its drop from Colorado’s second largest exportmarket to the number four position, at $242 mil-lion. Rounding out Colorado’s top 10 markets wereMalaysia, France, Singapore, the United Kingdom,Germany, and the Netherlands, in that order.

COLORADO’S TOP MANUFACTURED EXPORTS

Much of Colorado’s export growth in 2003 hasbeen due to the strong sales of electronic integratedcircuits and microassemblies. Colorado companiessold more than $520 million in this categorythrough July. Export sales of these products havebeen quite volatile during the past few years: down36.0% from 2000-2001, up 2.0% from 2001-2002,and up 38.0% over the same period last year. It isonce again the largest single category of Coloradoexports. The jump in the electronic integrated cir-cuits category—45.0%—was particularly impor-tant in Colorado’s sales to Asia, forming 35.0% ofall Colorado exports to the region. Asia is the domi-nant foreign buyer for these products, with 89.0%of all products in that category exported to theregion. The largest recipients are Korea andMalaysia. Sales in Colorado’s second largest exportcategory, automatic data processing machines andmagnetic readers, totaled $474 million, down 4.0%through July. The top destinations for these prod-ucts are Canada, the Netherlands, Germany, Japan,and the United Kingdom.

OUTLOOK FROM COLORADO’S MANUFACTURERS

Each year the University of Colorado at Boulder’sLeeds School of Business surveys manufacturersthroughout the state. Of the 400 surveys sent outthis year, 42 firms responded. While this is not alarge sample, the responses accurately reflect export-ing trends. Of the respondents, 69.0% of themactually export. Among the companies that export,the largest markets were Europe and NAFTA coun-tries, each with 31.0% of international sales (for theNAFTA partners, Canada was at 18.0% and Mexicoat 13.0%). Asia was the next largest trading area,accounting for 21.0% of export sales, with 4.0% ofthese to Japan. Australia and Oceania was anotherbig region, with 11.0% of international sales. Theremaining 7.0% of exports were to Latin America(excluding Mexico) at 3.0%, Africa/Middle East at2.0%, and Russia and the Newly Independent States(NIS) at 2.0%. Of the respondents, the average per-centage of current total sales that were exportedwas 20.0%. Firms estimate total global export salesgrowth at 10.0% during the next 18 months.

Although Colorado’s two largest export partnersare the NAFTA countries, companies anticipate ahigher growth rate of international sales to Asia,Europe, and Australia/Oceania at 16.0%, 12.0%,and 10.0%, respectively. A growth rate of 5.0%

for Canada and 4.0% for Mexico is predicted.Projected sales growth for the remaining markets isas follows: Latin America (Mexico excluded), 5.0%;Africa/Middle East, 4.0%; and Russia/NIS, 2.0%.There is not a single foreign market where compa-nies think sales growth will decline.

Colorado’s Agricultural Export TrendsColorado’s agricultural exports reached $933.3million in 2002, representing a 1.6% gain over 2001.This increase in exports has continued in 2003,with an additional growth through July 2003 of1.2% and projected year-end exports of $944.1 mil-lion. The U.S. Department of Agriculture (USDA)forecast for 2004 indicates continuing strength inthe export markets that should provide an addi-tional 6.2% growth leading to $1 billion in sales.

Colorado’s top agricultural exports are beef andmeat products, representing more than 39.0% of

Much of Colorado’s export growth in 2003 has been due to the strong sales of electronic integrated circuits andmicroassemblies.

2000 2001 2002

Mexico $ 78.7 $202.9 $237.7Japan 203.0 166.8 119.2Canada 131.9 113.2 102.7Korea 86.7 88.6 100.7Taiwan 75.4 77.5 79.4China/HKong 46.6 63.9 63.8Europe 21.8 19.6 21.0

COLORADO’S TOP AGRICULTURAL EXPORT MARKETS

(Value in U.S. Millions)


70

all exports. Other livestock based exports, includinghides and animal fats, represent an additional 18.0%of exports. Wheat is the next largest export sector,at 17.0%. The majority of all harvested wheat isexported each year. The remaining top agriculturalexports are shown on the chart on this page.

The depreciation of the U.S. dollar against foreigncurrencies, equaling almost 9.0% on a trade-weighted basis, makes U.S. agricultural exportsmore competitive in the world market. This shouldcontinue to positively impact exports into 2004.

The top seven international markets for Coloradoagricultural products represent $727.4 million,

or 78.0% of all sales. Colorado’s largest exportmarkets have shifted in the past three years, withthe Japanese market impacted by lackluster growthin gross domestic product and food safety issuesthat have specifically affected Colorado’s export ofbeef. Beef exports have experienced a 41.0% mar-ket retraction in three years. On the positive side,the Japanese economy is projected to register a1.0% growth in 2003, and in the first eight monthsof this year, Japan’s meat imports have grown morethan 40.0%. Mexico has surpassed Japan to becomethe largest agricultural export market for Colorado,with over 200.0% growth in the past three years.

Beef and livestock is Colorado’s largest agriculturalexport segment. Japan remains the largest exportmarket for beef; however, it has experienced nega-tive market pressure from the country’s use ofsafeguard measures against imported beef andpork. Rising U.S. market prices, combined withJapan’s increased tariffs on beef and pork, will con-tinue to impact export sales. In Mexico, the markethas also been led by beef, this time representingone of the fastest growing sectors for marketgrowth. The USDA is forecasting increased exportsin this segment in 2004 for both value and volumeof exported beef.


AGRICULTURAL EXPORTS FROM THE STATE OF COLORADOFISCAL YEARS 2000-2004



71

Colorado’s wheat industry has started to recoverfrom the lowest wheat harvest in 30 years, andpeople from this industry are developing produc-tion in a new class of wheat (hard white winterwheat). This product has strong global markets,and Colorado is now the second largest state inproduction of this wheat class.

The state’s agricultural industry will continue to be linked to the export market. The 2004 marketoutlook for key Colorado commodities is a strongglobal demand for Colorado’s agricultural prod-ucts, leading to record export growth in 2004.

International EducationFor academic year 2001-02 the number of interna-tional students attending colleges and universitiesin the United States increased, bringing the total toa record high of 582,996, according to the OpenDoor 2002 Annual Report by the Institute forInternational Education (IIE). This was a 6.4%increase over the previous school year of 2000-01.

The enrollment of international students atColorado colleges and universities rose slightly forthe 2001-02 academic year, according to figuresfrom the IIE’s Annual Census of Foreign Students.Statewide enrollment was 6,692 students, comparedto 6,442 for 2000-01, indicating a 3.9% increase.

The tuition and fees for these students during the2001-02 school year were $85.9 million and livingexpenses were $116.6 million. Using these figures,less the U.S. support for these students, interna-tional students’ total contribution to the state was$144.2 million.

International student enrollment for individualinstitutions in Colorado varies. Some schools areup slightly, others are down, while some remain thesame. Fortunately, increased enrollment at someschools offset small decreases at other schools.

A new preliminary study for 2002-03 shows thatthe number of foreign students attending U.S.colleges increased by less than 1.0%. Tightened visaprocedures enacted after the 2001 terrorist attacks,which have delayed the entry of many foreignersinto the United States, appear to have contributedto the lower growth rate. The committee believesthat this sector will continue to grow in 2004, butat a slower pace.

STATISTICS ON INTERNATIONAL EDUCATIONAL EXCHANGE

IN COLORADO

From the Institute of International Education’sOpen Doors Report 2002, statistics indicate that thetop field of study of foreign students in Colorado isbusiness and management (18.8%), followed bymath and computer science (16.4%) and engineer-ing (15.3%). Japan is the leading country of originfor foreign students in the state, with 628 students,or 9.4% of the total. Students from the Republic ofKorea total 585 (8.7%), and India supplies 567 stu-dents (8.5%). Additional statistics are available atIIE’s web site <http://opendoors.iienetwork.org/>.

International Travel and TourismThe Office of Travel and Tourism Industries(OTTI) issued a revised forecast for internationalarrivals to the United States. The forecast indicatesthat for the third straight year, the United Stateswill see a decline in arrivals. Total internationalarrivals to the country peaked in 2000, at 50.9 mil-lion visitors. In 2001 and 2002 total internationaltravel to the country declined, to 44.9 million and41.9 million, respectively. The new forecast for2003 shows that 40.1 million travelers will visit theUnited States. This is down 4.0% from 2002. Thedeclines in 2001 and 2002 have been greater for theUnited States than for other countries. Accordingto the new data released from the World TourismOrganization, the United States’ market share fortotal international arrivals worldwide has slippedto 6.0%. This is down dramatically since the 1992peak U.S. market share of 9.4%.

While 2003 will register a declining number ofvisitors to the country, the forecast for the next few years indicates that arrivals will see an averageannual 5.0% growth rate for 2004 to 2006, slowingslightly to a 4.0% growth rate in 2007. The fastestgrowth in arrivals between 2002 and 2007 amongthe 30-plus forecasted countries are India, up49.0%; Austria, up 45.0%; Denmark, up 35.0%;and United Kingdom, up 33.0%. There are numer-ous shifts in the top markets that generate visitorsto this country. The growth rates will vary eachyear as certain markets recover more quickly than others.


The new forecast for 2003 shows that 40.1 million travelers will visit the UnitedStates. This is down 4.0% from 2002.


72

For both the City of Denver and the state ofColorado, arrivals from Western Europeansdecreased from 2001 to 2002. For 2002 Coloradoranked 12th in Western European arrivals andreceived a total of 198,000 visitors, while the City of Denver ranked 21st among the cities surveyedand recorded 107,000 visitors. In 2001 Coloradohad 228,000 visitors, and the City of Denver had128,000 visitors. The Rocky Mountain Region(which includes Colorado) received 1,006,000 visi-tors in 2002 and 1,020,000 in 2001.

From the Asian market, Colorado actually receivedmore visitors in 2002 than in 2001 (97,000 and88,000, respectively). Data were not available forthe City of Denver for 2001, but in 2002, it received85,000 visitors. The Rocky Mountain Regionreceived 637,000 visitors in 2002 and 859,000 in 2001.

For the Australia and Oceania market, Coloradoranked seventh, with about 31,000 visitors. Noother information is available for Colorado or the City of Denver. The Rocky Mountain Regionrecorded 111,000 visitors in 2002 and 148,000visitors in 2001.

From the South American market, only data for the Rocky Mountain Region were available. In2002, it received 89,000 visitors, compared to162,000 in 2001.

Key countries for Colorado growth will be thetraditional ones, such as Canada, Mexico, theUnited Kingdom, and other Western Europeancountries. With a continuing and strong interna-tional marketing program throughout the state,international tourism should grow modestly alongwith national growth. ✜



73

Summary

For the first time since 1939, when the Bureau ofLabor Statistics first began tracking employ-

ment data, Colorado employment showed negativejob growth for two consecutive years, in 2002 and2003. This was only the second time that theUnited States has shown negative job growth inback-to-back years during this period.

The general consensus of the 81 outlook commit-tee members is the Colorado will return to positivejob growth in 2004, showing an increase of 32,300jobs, or 1.5% job growth. During the 1990s, theColorado economy relied on telecommunications,manufacturing, construction, and tourism to drivegrowth. Increased employment in these areasbrought strong growth in retail sales, businessservices, and local government. While all super-sectors of the state economy are expected to showimprovement over 2003, growth will occur in pro-fessional and business services, leisure and hospi-tality (tourism), health care, and retail trade.

The growth rate for Colorado population will con-tinue to outpace that of the United States. The stateis expected to grow at a rate of 1.3% compared to1.0% for the country. The state growth rate has sub-stantially slowed over previous years as decreasingin-migration has dropped from an average of 72,800people per year from 1993 to 2001 to 36,700 peoplein 2002, 16,500 in 2003, and 18,800 in 2004. Therecent recession is much different from the recessionduring the 1980s when Colorado showed negativenet migration for the five years from 1986 to 1990.

Since 1950, the state has experienced negative jobgrowth only four times. During this same period


NEW JOBS CREATEDIN NONAGRICULTURAL WAGE AND SALARY EMPLOYMENT SECTORS


74

the U.S. economy showed negative job growth oneight occasions. In 1954 Colorado’s decrease of 1.3%was followed by a 5.0% increase in employment.The more shallow decrease of 0.7% in 1986 wasfollowed by a gain of 0.3% in 1987. In November2002 we were optimistic that the economy wouldrebound quickly; however, the 1.9% decreaseincurred in 2002 proved to be too much of a holeto dig out of given the weak national recovery. Theyear 2003 will go on record as a second consecutiveyear of job loss, albeit at a much smaller rate. A1.5% employment increase is expected in 2004.

On the down side, the traditional goods-producingsupersectors are expected to shed 5,000 jobs in 2004.About 4,700 jobs will be lost in Construction and1,100 jobs will be lost in Manufacturing. The NaturalResources and Mining Supersector will be the onlygoods-producing sector to add jobs, approximately800, in 2004.

Growth in state employment during 2004 will beled by the service-producing supersectors, whichare expected to add about 39,000 jobs. This is adramatic turnaround from 2003 when these sec-tors combined lost 12,000 jobs. The GovernmentSupersector is the only service-producing supersec-tor expected to show a decrease in 2004, with a lossof 1,700 jobs.

Even though the Colorado economy does notdirectly track the national economy, its growthdepends on strong national and internationaleconomies. As we look forward, committee membersbelieve the events listed below are key to the futuregrowth and prosperity of Colorado’s economy.

NATIONAL AND INTERNATIONAL

• Increased business investment, along will stableconsumption growth, will be the critical driversin 2004.

• The situation in the Middle East and the con-stant threat of terrorism will create a level ofuncertainty among consumers and businesses.

• Improving global markets will positively impactmanufacturing and agriculture-based companiesthat have international sales. Internationaltourism visits should also increase.

• Historically, the stock market performs at ahigher than average level during presidentialelection years. The rally that began in November2002 and has been more pronounced in 2003will continue into 2004.

• Interest rates are likely to show modest increasesin 2004. However, they will continue to remainlow from a historical perspective.

COLORADO

• Both state officials and local government com-munities will continue to investigate the meritsof de-Brucing as the restrictions of the TABORamendment have kept them from providing nec-essary services.

• State tax revenues are expected to improve;however, the state legislature will continue to face difficult fiscal decisions and will operate in a defensive mode unless, and until, tax reform occurs.

• Higher education, a major driver of the state’seconomy, will have to rely more heavily on exter-nal sources to maintain or improve the quality of education.

• While the effects of the 2002 drought receded inthe Denver metro area during 2003, they contin-ued to negatively impact many agriculture-basedeconomies in the southern and southwesternparts of the state. Many ranchers were forced tosell their breeding stock because of the droughtof 2002 and rebuilding herds has been difficult.

• Retail trade sales are expected to grow at a rategreater than the state CPI-U. However, reducednet migration and increased competition as aresult of a saturated retail sales market will pre-vent strong growth in retail sales. State sales maybe negatively impacted by e-commerce sales,which will continue to increase as consumersbecome more confident with shopping over the Internet.

• Reduced net migration, an overbuilt multi-family housing market, and excess office andcommercial capacity will constrain construc-tion employment.

• The construction of new homes in the lower-end markets and the oversupply of multifamilyunits will continue to reduce pressure for afford-able housing.

• Firms will benefit from loosening labor markets;they can be selective about finding replacementemployees and hiring new employees when busi-ness improves. ✜

Summarycontinued from page 73


75

Historically, the La Plata County economy hasbeen driven by tourism. The base industry

studies conducted by the Department of LocalAffairs show that about 34.0% of the county’s basicjobs are tourism related. Approximately 20.0% ofbasic jobs are related to resorts and 5.0% are relatedto second homes. While tourism remains animportant part of the local economy, it has beendeclining since 1992. The proposed construction atDurango Mountain Resort will strengthen La PlataCounty’s tourism industry in the years ahead.

The Econometer, a newsletter of economic indica-tors published by Vernon Lynch, the director of theOffice of Economic Analysis and Business Researchat Fort Lewis College, reports that during the sec-ond quarter of 2003 La Plata County most sectors

showed an improvement compared to the sameperiod last year. The Econometer index, used totrack the local economy, increased by 3.8% com-pared to the second quarter of 2002. The con-struction and energy sectors led the expansion.On a year-to-year basis, most sectors of the localeconomy, including energy prices, construction,bank deposits, calf prices, real estate prices, indus-trial activity, employment, population, and retailsales, expanded during the second quarter of 2003.This growth in the economy is expected to con-tinue in 2004.

The La Plata County economy is highly seasonal,which means that some sectors of the local econ-omy change significantly during the course of theyear. Diversification of the La Plata economy has

occurred with growth in the population and work-force. The Econometer index tracks both the annualand seasonal variations in the economy and illus-trates this diversification. It shows that negativevariations in individual sectors are offset by posi-tive changes in any one sector. The three topemployers in La Plata County — the DurangoSchool District 9-R, Mercy Hospital, and FortLewis College—provide the foundation for thisdiversification.

In addition to publishing the Econometer, FortLewis College also conducts the SouthwestBusiness Forum each January. ✜

From Around the State: La Plata County


76

The rate of growth in Mesa County’s economybegan to slow during the latter part of 2002

and the early months of 2003 as evidenced by ahigher unemployment rate during this period. Theaverage unemployment rate for 2001 was 3.9%. Bythe end 2002, the annual average had increased to4.9%. The current rate stands at 4.7%. The changesin employment indicate the steady growth in thesize of the county’s labor force, which in turnreflects the annual 2.6% increase in population. Thelabor force grew from an annual average of 60,752persons in 2001, to 64,210 in 2002, and 69,129 inAugust 2003. The number of persons employed hasincreased steadily from an annual average of 58,376in 2001 to 65,564 in August 2003. The rate ofincrease in the number employed has, at times,lagged behind the increase in the labor force, thusaccounting for the changes in unemployment rates.

The slowing of economic activity is also reflectedin less pronounced increases in the leading sectorindicators over the last 12 months. However, noneof the indicators declined in absolute value overthose values observed in previous periods. Sincethe summer of 2003, the rates of growth in leadingindicators have increased. The most notable posi-tive indicator was construction activity as meas-ured by growth in the number and value of countybuilding permits, both residential and commercial.Also noteworthy was the increase in countywideretail sales as indicated by sales tax collections.Both year-to-date and quarter-to-quarter growthwere observed for the 2003 summer months.Consumer spending in Mesa County continues tobuoy the level of economic activity. This spending

mirrors that occurring in the national and stateeconomies. The importance of the retail sector inMesa County is underscored by the fact that nearly20.0% of the jobs are in the retail sector, with atleast another one-fourth of jobs emanating fromthe services sector. The county does not have alarge manufacturing sector.

The year-to-date values for tourism indicators,such as lodging tax collections, visitor and con-vention bureau visits, and visits to the ColoradoNational Monument, exhibited an upswing duringthe summer and fall months of 2003. Also, specialevents, such as the Junior College World Series andmusic festivals hosted by Country Jam and localwineries, were instrumental in attracting morevisitors to Mesa County. The county continues todraw attention from bicycling and other outdoorenthusiasts nationwide.

Much of the job growth in the Mesa County econ-omy over the last several years has occurred in theservices sector, especially business and services andfinance, insurance, and real estate. Growth insocial, health, and education services has resultedin substantial job expansion as well. Mesa County

continues to expand as a regional provider of con-sumer goods, as well as business, health, education,and transportation services. The basic income gen-erated by these sectors and enhanced by higherthan average increases in nonlabor income, such as retirement and interest income, accounts formuch of the year-to-year growth in personalincome and employment.

The Bureau of Economic and Business Research at Mesa State College has formed a partnershipwith Mesa County Administration, the City ofGrand Junction, the Grand Junction EconomicPartnership, the Western Colorado BusinessDevelopment Corporation, and the GrandJunction Area Chamber of Commerce. The bureauhas agreed to develop a new set of economic indi-cators and conduct studies in order to betterdescribe and track changes in the local economy.These same groups were instrumental in sponsor-ing the recently completed Mesa County EconomicDevelopment Forum. The forum drew some 200participants from public and private groups in thecounty. It is hoped that continued widespreadpublic participation will result in a broader coor-dinated effort directed toward the county’s eco-nomic development.

The recent upswing in our leading economic indi-cators and the growing interest in monitoring thedirection and quality of local economic growthbode well for the future of Mesa County. ✜

From Around the State: Mesa County

The year-to-date values for tourism indica-tors, such as lodging tax collections, visi-tor and convention bureau visits, andvisits to the Colorado National Monument,exhibited an upswing during the summerand fall months of 2003.


77

From Around the State: Northern Colorado

The 2004 business outlook for northernColorado looks bright. With more than $1 bil-

lion in new capital construction slated for theregion during the next two years, we can look for-ward to many exciting groundbreakings and rib-bon cuttings. Here is a snap shot of some of themajor construction projects.

The $62.5 million Larimer County Fairgroundsand Events Center was just completed. Locatedwithin a five-mile radius will be two large hotels,one of the largest Harley-Davidson stores west ofthe Mississippi, and a new regional hospital.Poudre Valley Health Systems will construct a550,000-square-foot, five-story regional hospital at Centerra, in Loveland, which will create 600 newjobs. At least one major “lifestyle shopping center”has been announced, bringing another 500,000square feet in new construction. Owens-Illinois willbreak ground on a 550,000-square-foot bottlingplant near Windsor. A new biotechnology com-pany will begin construction on a 60,000-square-foot facility in Loveland. Another new company isexpected to break ground on a 59,000-square-footfacility in Fort Collins. In total, more than 1,000new jobs will be created from new industry.

Several existing industry expansions are pending,which will produce another 1,000 new primaryjobs during the next two years. In addition, thereare five notable health-care industry expansions,namely the ones in the Poudre Valley HealthSystem (with three expansion projects) and theMcKee Medical Center expansion, which willpump another $70 million into the Loveland econ-omy. In nearby Greeley, the Northern ColoradoMedical Center plans a $130 million expansion.Additionally, Greeley voters recently approved $100million in “quality-of-life” projects.

Colorado State University is breaking ground on a $72 million expansion of the Centers for DiseaseControl. The university has another $33.2 million inprojects under construction, one of which is a newconcert hall. Several projects are also under designreview, including a new 700-room dormitory. Theuniversity is expanding its Natural ResourcesCenter and its Bio Hazard Containment Lab.

Several new large retail and grocery store develop-ments are also being built in northern Colorado.King Soopers and Safeway stores are constructingnew facilities. New Dillard’s and Foley’s depart-ment stores have been announced. Several new

bank branches are under construction. In addition,the $27 million expansion of the Larimer CountyCourthouse has just been completed. Furthermore,at least 5,000 new homes and condos will be con-structed in northern Colorado, bringing the valueof new construction to more than $1 billion.

Bottom line, more than $1 billion of new capitalconstruction, along with more than 3,000 newjobs, will be created in northern Colorado duringthe next two years. ✜

Several existing industry expansions arepending, which will produce another 1,000new primary jobs during the next two years.


78

Pueblo’s economy seems to have turned thecorner along with the state and national

economies, rebounding from a trough in early2003 in terms of consumer confidence and unem-ployment. The most recent survey of Pueblo resi-dents conducted in September produced aconsumer confidence index of 85, substantiallyhigher than February’s record low of 68.

The unemployment rate for Pueblo County was6.3% in September. This rate is largely unchangedfrom last year; however, the situation was worseonly six months ago, when unemploymentexceeded 7.0%. Employers in Pueblo County haveadded 720 jobs this year.

Due largely to unprecedented low interest rates,residential construction in Pueblo continues toflourish. Single-family housing starts totaled 900units through the end of the third quarter, an 8.2%increase compared to the corresponding threequarters of 2002. During this period, Coloradoexperienced an 8.2% decrease in single-familyconstruction, according to figures compiled by theBureau of the Census. Home mortgage foreclosure

filings continued to rise, posting a 23.0% gain forthe first nine months of the year compared to 2002.

There has been good and bad news so far in 2003in terms of primary employment. In March, theBoeing Co. announced that it would be closing itsPueblo operation that manufactures Delta satellitelaunch vehicles. About 250 jobs will be lost over thecourse of the next year. Budget cuts at the newlyrenamed Colorado State University-Puebloresulted in elimination of more than 55 jobs.

These losses were offset by the announcement thatAdams Aircraft, with headquarters in ArapahoeCounty, would be locating a plant in Pueblo thatcould hire as many as 450 workers over the nextthree years. In addition, the Pueblo Chemical Depotdecontamination project managed by BechtelCorporation is beginning to ramp up, and willemploy approximately 1,300 workers over the nextdecade. In July, the City of Pueblo offered a 34-acresite to WCC (formerly Wackenhut CorrectionsCorp.) to build a prison facility adjacent to theAirport Industrial Park. Pending litigation by acitizens’ group, the facility could house up to 700inmates and offer employment to 160 workers.

Pueblo continues to solidify its position as aregional center for health-care and retail services as shown by expansions at the two local hospitals.A $20 million expansion of facilities at ParkviewMedical Center was recently completed. Over thenext few years this sector should see additional jobgrowth as St. Mary Corwin Hospital embarks on itsown expansion. Houston Construction, a Pueblo-based contractor, won the contract for the initialphase of this $71 million expansion.

The retail sector should benefit from the antici-pated construction of the Pueblo Crossings shop-ping center, located on the city’s north side. Theproject will be built in two phases, with initial storeopenings slated for October 2004. A Kohl’s depart-ment store is the anchor retailer for the first phaseof the project.

The combination of current economic conditionsand future prospects paints the picture of aregional economy on the verge of sustained eco-nomic growth. ✜

From Around the State: Pueblo County

These losses were offset by the announce-ment that Adams Aircraft, with headquartersin Arapahoe County, would be locating aplant in Pueblo that could hire as many as450 workers over the next three years.


79


In October 2003, the College of Business at theUniversity of Colorado at Colorado Springs held

its Seventh Annual Southern Colorado EconomicForum. Comments in this section are based onresults presented at that forum.

The national slowdown still holds a grip on thesouthern Colorado economy. The economy sloweddramatically after 9/11 and has not regained muchstrength since then. Although the technology sec-tors are experiencing fewer layoffs, there still is notenough new job creation to replace the ones thatwere lost. While some indicators are improving,there are still signs of a sluggish economy, particu-larly in the employment picture.

Last year’s accounting scandals have worked theirway through the economy, and the stock marketappears to be reacting to better corporate newssince it bottomed out in September 2002. Sincethen, the S&P 500 Index has gone up 22.0%.Compared to a year ago, several measures are driv-ing optimism in the stock market. Corporate prof-its are up 12.0%, consumer sentiment rose 3.1%,and interest rates are down 75 basis points. Theimproved market indicators appear to reflect theinvestment community’s expectation of a strongereconomy in the next 6 to 12 months.

Housing and ConstructionThe market for single-family and townhome resi-dential units has been stronger than the generalperformance of the local economy. In 2003 single-family housing is expected to decline 16.0% com-pared to 2002, to a total of 4,100 permits. This is

most likely a strong number, especially when netmigration for 2003 is expected to be only 778 peo-ple. The natural increase in population is expectedto add 5,300 people, for a total gain of 6,078. Thispopulation growth is approximately two-thirds ofthe average annual increase in El Paso County dur-ing the 1990s. With the average household size of2.6 people, this population gain supports 2,338 newsingle-family residential units, not the 4,100 unitsprojected for 2003 based on current trends. Tradi-tionally, the population splits its housing prefer-ences into one-third renters and two-thirds owners.This implies that the population increase for 2003would support only 1,543 new single-family units.

Despite the apparent overproduction of single-family housing units during 2003, the forumbelieves the units will continue to sell at close to theprojected pace of approximately 4,100 units. Homeaffordability has increased tremendously due to thedrop in mortgage rates. The forum expects thatmost of the people looking for a place to live willpurchase a home rather than rent an apartment.This is anticipated to continue into 2004 whenmortgage rates are projected to be in the 6.5 to

6.75% range. While these projected rates are higherthat those in 2003, home ownership will remainextremely attractive. Relatively high absorption ofnew single-family housing units will come at theexpense of more multifamily vacancies.

The weak recovery and low net in-migration pointto a modest decline in single-family housing for2004. The forum projects total single-family andtownhome construction in 2004 will be 3,895units, a 5.0% decline. Nonresidential construction,which shows a great deal of year-to-year volatility,is forecast to decline 1.1% in 2003 and increase1.0% in 2004.

Employment and WagesThe average unemployment rate for 2003 isexpected to be 6.1%. A modest improvement inunemployment is projected in 2004 and is forecastto average 5.8%. We do not expect much change inthe unemployment picture in the first half of 2004,unless there is an unforeseen recovery in the manu-facturing and technology sectors. Nonagriculturalemployment is expected to remain flat in 2003 andgrow by 1.7% in 2004. Average salaries will increase1.5% this year and 3.0% in 2004. The smallincreases in wages and salaries reflect the loss ofmanufacturing and other high-paying jobs in thecommunity. Total wage and salary income will riseby only 1.5% in 2003 and 4.8% in 2004. Personalincome, which is affected by wages and salaries,is expected to increase 3.0% in 2003 and 3.5% in 2004.

From Around the State: Southern Colorado

Home affordability has increased tremen-dously due to the drop in mortgage rates.


80

From Around the State: Southern Coloradocontinued from page 79

The MilitaryThe military’s normally positive impact on thelocal economy has eroded due to the deploymentof troops from Fort Carson to Iraq. An estimated11,000 troops were deployed and are expected to bein Iraq until March or April of 2004. Allowing forhousehold size and an estimated 15.0% of spousesand children leaving the area due to the deploy-ment, we estimate a direct loss in salary of $165.6million a year. Based on Keynes’ government mul-tiplier model, the direct impact will magnify andripple through the economy to an estimated loss of$518.2 million to the local economy.

The loss in economic activity will also affect thegovernment sector. According to a Department ofLabor’s study of household spending patterns, thetypical household will spend approximately 26.3%of its income on items subject to state and localsales tax. Thus, the potential lost sales taxes for theCity of Colorado Springs attributed to troopsdeployed from Fort Carson is $4.6 million. Thisassumes the economic impact is immediate, com-plete, and sustained. It is more likely the impact

will be spread over the course of a year, will endwhen the troops return, and will not be fully real-ized. The forum estimates the actual lost sales taxesto Colorado Springs will be closer to $2.5 million.El Paso County will lose approximately $1.04 mil-lion in sales tax collections.

The loss of business while the troops are in Iraqwill be greatest among firms catering to local resi-dent services used by the soldiers at Fort Carson.This impact will be felt most by businesses near thebase, and is expected to be large enough that somelocal companies will not hire any employees orworse, may lay-off existing employees. Using thesame assumptions that the deployment is tempo-rary and its impact lags the actual deployment, theforum estimates as many as 595 jobs, full and part-time, could be lost until the troops return. Thiscould raise the local unemployment rate by 0.25%.

Retail and Wholesale TradeRetail sales in El Paso County were up 3.0% in2002 and are running close to the 2002 level in2003. This is encouraging given the general decline

in the economy, the slowdown in building, reducedsales volumes in furniture and automobiles, andthe deployment of troops from Fort Carson toIraq. The taxable components of retail sales arerunning behind that of 2002. As a result, ColoradoSprings sales tax collections through July 2003 are2.4% below the 2002 levels. The expected strength-ening of our economy should produce an increasein retail sales of 3.0% in 2004. The opening of theShops at Briargate will help keep some higher-endretail trade business in the county and attract addi-tional businesses to this area.

Wholesale sales rose just under 12.0% in El PasoCounty during 2002. Given the increasing level of economic activity, the forum expects wholesaleactivity in El Paso County to outpace that ofColorado. Wholesale sales were up 22.0% in thefirst quarter of 2003 over year-earlier figures.Provided this pace continues, wholesale sales in El Paso County should increase at least 15.0% in2003. Wholesale sales in El Paso County for 2004are also expected to be strong, with at least 10.0%growth over 2003. ✜

81

Dr. Richard WobbekindDirectorUniversity of Colorado at BoulderBusiness Research Division420 UCBBoulder, CO [email protected]

Ms. Laurel AlpertSenior Deputy Director, International TradeColorado International Trade OfficeColorado Office of Economic Development

and International Trade1625 Broadway, Suite 1700Denver, CO [email protected]

Mr. John BartholomewEconomistDepartment of Health Care Policy and

Financing1570 Grant Street, 3rd FloorDenver, CO [email protected]

Mr. James CappaChief, Mineral and Mineral Fuels SectionColorado Geological Survey1313 Sherman Street, Room 715Denver, CO [email protected]

Mr. James ChiversEconomistColorado Department of Labor and

Employment1515 Arapahoe Street, Tower 2, Suite 300Denver, CO [email protected]

Mr. James CoilRegional EconomistU.S. Department of Housing and Urban

Development633 17th StreetDenver, CO [email protected]

Ms. Cindy DiPersio Publications CoordinatorUniversity of Colorado at BoulderBusiness Research Division420 UCBBoulder, CO [email protected]

Dr. Steve FisherEconomist2 Benthaven PlaceBoulder, CO [email protected]

Ms. Jeanette GanousisSr. Vice President, Corporate Banking and

FinancialKeyBank1675 Broadway, Suite 500Denver, CO [email protected]

Dr. Charles Goeldner Professor Emeritus of TourismUniversity of Colorado at BoulderLeeds School of Business420 UCBBoulder, CO [email protected]

Mr. Mark HamouzLONCO, Inc.1700 Broadway, Suite 800Denver, CO [email protected]

Mr. Gary HorvathUniversity of Colorado at BoulderBusiness Research Division420 UCBBoulder, CO [email protected]

Mr. Wilson KendallPresidentCenter for Business and Economic Forecasting1544 York Street, Suite 220Denver, CO [email protected]

Ms. Donna MarshallExecutive DirectorColorado Business Group on Health200 South Sheridan Boulevard, Suite 105Denver, CO [email protected]

Mr. Richard MorganVice President and Manager, Commercial

BankingUS Bank918 17th Street, 5th FloorDenver, CO [email protected]

Mr. Penn PfiffnerConsulting EconomistConstruction Economics720 Kipling Street, Suite 12Lakewood, CO [email protected]

Mr. James RubinghMarketing DirectorColorado Department of AgricultureMarkets Division700 Kipling Street, Suite 4000Lakewood, CO [email protected]

Mr. Tim SheesleyCorporate EconomistXcel Energy1225 17th Street, Suite 1000Denver, CO [email protected]

Ms. Patty SilversteinPresidentDevelopment Research Partners10184 West Belleview Avenue, Suite 100Littleton, CO [email protected]

Mr. Chris UnderwoodManager, CICPDepartment Health Care Policy and FinancingColorado Indigent Care Program1575 Sherman, 10th FloorDenver, CO [email protected]

Steering Committee Members

82

Population, Labor Force, andEmployment

Mr. James Chivers (Chair)EconomistColorado Department of Labor and

Employment1515 Arapahoe Street, Tower 2, Suite 300Denver, CO [email protected]

Dr. Richard Lin Projections Demographer/EconomistColorado Division of Local Government1313 Sherman Street, Room 521Denver, CO [email protected]

Mr. Jim Westkott Projections Demographer/EconomistColorado Division of Local Government1313 Sherman Street, Room 521Denver, CO [email protected]

Mr. Joseph Winter Supervisor CESColorado Department of LaborLabor Market Information1515 Arapahoe, 2 Park Central, Suite 300Denver, CO [email protected]

Agriculture

Mr. James Rubingh (Chair)Marketing DirectorColorado Department of AgricultureMarkets Division700 Kipling Street, Suite 4000Lakewood, CO [email protected]

Mr. Lewis Frank State Executive DirectorFarm Service Agency, USDA655 Parfet StreetLakewood, CO [email protected]

Mr. Lance Fretwell StatisticianColorado Agriculture Statistics Service, USDA645 Parfet Street, Room W201Lakewood, CO [email protected]

Mr. Darrell Hanavan Executive DirectorColorado Association of Wheat Growers7700 East Arapahoe Road, # 220Englewood, CO 80112303-721-3300 ext. [email protected]

Mr. Steve Koontz Associate ProfessorColorado State UniversityAg & Resource EconomicsB306 Andrew G. ClarkFort Collins, CO [email protected]

Ms. Renee Picanso DirectorColorado Agricultural Statistics Service, USDA645 Parfet Street, Room W201Lakewood, CO [email protected]

Mr. Jim Robb Center DirectorLivestock Marketing Information655 Parfet Street, Room E310Lakewood, CO [email protected]

Natural Resources andMining

Mr. James Cappa (Chair)Chief, Mineral and Mineral Fuels SectionColorado Geological Survey1313 Sherman Street, Room 715Denver, CO [email protected]

Mr. Bob Burnham Hill and Associates, Inc.16357 West 76th AvenueArvada, CO [email protected]

Mr. Chris Carroll Coal GeologistColorado Geological Survey1313 Sherman Street, Room 715Denver, CO [email protected]

Mr. John Keller Minerals GeologistColorado Geological Survey1313 Sherman Street, Room 715Denver, CO [email protected]

Mr. Stuart Sanderson PresidentColorado Mining Association216 16th Street, Suite 1250Denver, CO [email protected]

Mr. John Tobin Executive DirectorEnergy Literacy Project2528 Medinah DriveEvergreen, CO [email protected]

Ms. Genevieve Young Petroleum GeologistColorado Geological Survey1313 Sherman Street, Room 715Denver, CO [email protected]

Construction

Mr. James Coil (Co-Chair)Regional EconomistU.S. Department of Housing and Urban

Development633 17th StreetDenver, CO [email protected]

Estimating Groups

Mr. Penn Pfiffner (Co-Chair)Consulting EconomistConstruction Economics720 Kipling Street, Suite 12Lakewood, CO [email protected]

Ms. Mary Ann Ivey Director, Government RelationsColorado Contractors AssociationP.O. Box 3489Englewood, CO [email protected]

Mr. Gene Morton Manager, Administrative ServicesGerald Phipps, Inc.1530 West 13th AvenueLittleton, CO [email protected]

Mr. Scott Peterson ManagerGerald H. Phipps, Inc.1530 West 13th AvenueDenver, CO [email protected]

Mr. Michael Rinner MAIThe Genesis Group9110 East Nichols Avenue, Suite 120Englewood, CO 80112303-662-0155mrinner@the genesisgroup.net

Mr. Al Slattery Mountain States PublisherMcGraw Hill Construction2000 South Colorado Boulevard, Suite 2000Denver, CO [email protected]

Manufacturing

Ms. Patty Silverstein (Chair)PresidentDevelopment Research Partners10184 West Belleview Avenue, Suite 100Littleton, CO [email protected]

Dr. Fred Crowley Associate Research ProfessorUniversity of Colorado at Colorado SpringsCollege of Business and AdministrationP.O. Box 7150Colorado Springs, CO [email protected]

Mr. Jim Leonard Project ManagerProduct InnovationP.O. Box 2346Evergreen, CO [email protected]

Ms. Sue Piatt Research ManagerColorado Office of Economic Development &

International Trade1625 Broadway, Suite 1700Denver, CO [email protected]

Ms. Elaine Thorndike DirectorMAMTC–Colorado5353 Manhattan Circle, Suite 103Boulder, CO [email protected]

Dr. Tom Zwirlein Professor of FinanceUniversity of Colorado at Colorado SpringsCollege of Business and AdministrationP.O. Box 7150Colorado Springs, CO [email protected]

Trade, Transportation, andUtilities

Mr. Wilson Kendall (Co-Chair)PresidentCenter for Business and Economic Forecasting1544 York Street, Suite 220Denver, CO [email protected]

Mr. Tim Sheesley (Co-Chair)Corporate EconomistXcel Energy1225 17th Street, Suite 1000Denver, CO [email protected]

Ms. Susan Conwell Statistical AnalystColorado Department of RevenueOffice of Tax Analysis1375 Sherman StreetDenver, CO [email protected]

Mr. John Ferguson Managing PrincipalFerguson-Peppard Group, LLC12000 WashingtonThornton, CO [email protected]

Mr. Gregory Fulton PresidentColorado Motor Carriers Association4060 Elati StreetDenver, CO [email protected]

Ms. Laura Jackson Global Market PlannerDenver International Airport8500 Pena BoulevardDenver, CO [email protected]

Mr. Jeff May DirectorDenver Regional Council of Governments

(DRCOG)Metro Vision Resource Center4500 Cherry Creek Drive South, Suite 800Denver, CO [email protected]

Mr. Arne Ray PartnerSzymanski/Ray901 Acoma StreetDenver, CO [email protected]

Mr. Jeff Romine Regional EconomistDenver Regional Council of Governments

(DRCOG)2480 West 26th Avenue, #200BDenver, CO [email protected]

Information

Dr. Richard Wobbekind (Chair)DirectorUniversity of Colorado at BoulderBusiness Research Division420 UCBBoulder, CO [email protected]

Ms. Stephanie Two Eagles Program ManagerColorado Film Commission1625 Broadway, Suite 1700Denver, CO [email protected]

83


84

Estimating Groupscontinued from page 83

Finance

Ms. Jeanette Ganousis (Co-Chair)Sr. Vice President, Corporate Banking and

FinancialKeyBank1675 Broadway, Suite 500Denver, CO [email protected]

Mr. Richard Morgan (Co-Chair)Vice President and Manager, Commercial

BankingUS Bank918 17th Street, 5th FloorDenver, CO [email protected]

Mr. Fred Joseph Securities CommissionerColorado Division of Securities1580 Lincoln, Room 420Denver, CO [email protected]

Mr. Byron Koste DirectorUniversity of Colorado at BoulderReal Estate Center419 UCBBoulder, CO [email protected]

Mr. Phil Kroeker Vice President, Member ServicesColorado Credit Union League4905 West 60th AvenueArvada, CO [email protected]

Professional and BusinessServices

Dr. Steve Fisher (Co-Chair)Economist2 Benthaven PlaceBoulder, CO [email protected]

Mr. Mark Hamouz (Co-Chair)LONCO, Inc.1700 Broadway, Suite 800Denver, CO [email protected]

Education and HealthServices

Ms. Donna Marshall (Co-Chair)Executive DirectorColorado Business Group on Health200 South Sheridan Boulevard, Suite 105Denver, CO [email protected]

Mr. Gary Horvath (Co-Chair)University of Colorado at BoulderBusiness Research Division420 UCBBoulder, CO [email protected]

Ms. Kim Hacker Project ManagerRose Community Foundation600 South Cherry Street, Suite 1200Denver, CO [email protected]

Leisure and Hospitality

Dr. Charles Goeldner (Co-Chair)Professor Emeritus of TourismUniversity of Colorado at BoulderLeeds School of Business420 UCBBoulder, CO [email protected]

Ms. Cindy DiPersio (Co-Chair)Publications CoordinatorUniversity of Colorado at BoulderBusiness Research Division420 UCBBoulder, CO [email protected]

Mr. Don Bruns Recreation PlannerU.S. Department of Interior Bureau of Land

ManagementColorado State Office2850 Youngfield StreetLakewood, CO [email protected]

Mr. Eugene Dilbeck Lambert-Dilbeck Marketing Resources3551 South Monaco Parkway, Suite 205Denver, CO [email protected]

Dr. Tucker Hart Adams PresidentThe Adams Group, Inc.4822 Alteza DriveColorado Springs, CO [email protected]

Mr. Bill Hopping PresidentW.R. Hopping & Company5773 Shasta CircleLittleton, CO [email protected]

Mr. Tim King Technology ManagerState of ColoradoDepartment of Natural Resources–State Parks1313 Sherman Street, Room 618Denver, CO [email protected]

Dr. John Snyder PresidentStrategic Studies, Inc.1789 East Otero AvenueLittleton, CO [email protected]

Ms. Cindy Weindling Executive Vice PresidentColorado Restaurant Association430 East 7th AvenueDenver, CO [email protected]

85

Government

Mr. John Bartholomew (Co-Chair)EconomistDepartment of Health Care Policy and

Financing1570 Grant Street, 3rd FloorDenver, CO [email protected]

Mr. Chris Underwood (Chair)Manager, CICPDepartment Health Care Policy and FinancingColorado Indigent Care Program1575 Sherman, 10th FloorDenver, CO [email protected]

Mr. David Eppich Assistant to the PresidentFort Lewis College1000 Rim DriveDurango, CO [email protected]

Ms. Jessica Morgan EconomistDevelopment Research Partners, Inc.10184 West Belleview Avenue, Suite 100Littleton, CO [email protected]

Mr. Luke Rodgers EconomistDepartment of Health Care and Financing1570 Grant StreetDenver, CO [email protected]

International Trade

Ms. Laurel Alpert (Chair)Senior Deputy Director, International TradeColorado International Trade OfficeColorado Office of Economic Development


Mr. Paul Bergman, Jr.Senior International Trade SpecialistU.S. Export Assistance Center1625 Broadway, Suite 680Denver, CO 80202303-844-6001, ext. [email protected]

Ms. Stephanie Garnica Director–Latin AmericaColorado International Trade OfficeColorado Office of Economic Development


Mr. Timothy Larsen Senior International Marketing SpecialistColorado Department of AgricultureMarkets Division700 Kipling Street, Suite 4000Lakewood, CO [email protected]

Ms. Sandi Moilanen Europe Trade DirectorColorado International Trade OfficeColorado Office of Economic Development


Mr. Jim Reis PresidentWorld Trade Center Denver1625 Broadway, Suite 680Denver, CO [email protected]

Around the State

Mr. Daniel Arosteguy DirectorMesa State CollegeBureau of Economic and Business Research1100 North AvenueGrand Junction, CO [email protected]

Dr. Skip Cave DeanFort Lewis CollegeSchool of Business Administration1000 Rim DriveDurango, CO [email protected]

Dr. Jay Goodman ProfessorUniversity of Southern ColoradoHasan School of Business2200 Bonforte BoulevardPueblo, CO [email protected]

Mr. J. J. Johnston CEO/COONortheren Colorado Economic Development

Corporation2725 Rocky Mountain Avenue, Suite 210Loveland, CO [email protected]

Mr. Vern Lynch DirectorFort Lewis CollegeOffice of Economic Analysis and Business

Research1000 Rim DriveDurango, CO [email protected]

Mr. Don Vest City of PuebloDepartment of Planning and Development211 East ‘D’ StreetPueblo, CO [email protected]

86


Business Research DivisionLeeds School of Business


420 UCB


303-492-8227 • Fax: 303-492-3620

http://leeds.colorado.edu/brd/

For more than 85 years, the Business ResearchDivision (BRD) of the Leeds School of Business

has been providing business, economic, and mar-ket research that contributes to the efficient use ofColorado’s resources. Through its annual ColoradoBusiness Economic Outlook Forum, the BRD hasestablished a base of knowledge that adds value tothe division’s work in other areas. In addition toproviding research to public and private organiza-tions, the division is the umbrella organization forCU-BAC, MAMTC-Colorado, and RMTAAC.

Purposes of Unit The BRD provides business, economic, and marketresearch that contributes to the efficient use ofColorado’s resources and increases interest in andawareness of the Leeds School of Business. TheBRD provides support to the Colorado businesscommunity in the following areas:

Industry Support—Through research conductedwith companies, associations, nonprofit organiza-tions, educational institutions, and state and local

governmental agencies throughout the world, theBRD has developed primary competencies in theareas of manufacturing issues and trends, theimpact of government and government policy, therole and impact of technology in Colorado, andissues in the health-care industry. Secondary com-petencies have been developed as a result ofresearch conducted in the construction, trade,services, and finance sectors.

Research for the State of Colorado—EachDecember the BRD presents its annual forecast of the Colorado state economy. Subsequent pre-sentations are made during the year throughoutthe state.

Faculty and Center Research—The BRD cooper-ates with other centers in the Leeds School ofBusiness and faculty members to assist them withconducting applied, relevant research that benefitsthe business community and the Leeds School ofBusiness.

Student Research—The BRD provides oppor-tunities for students to gain practical business

experience by involving them in business and eco-nomic-related research projects.

U.S. Census Research—The division providesassistance to members of the business communityin finding relevant information from U.S. censusreports by obtaining and using statistical data,summary tape files, and related products. The divi-sion is an affiliate in the State Data Center System.

Areas of ExpertiseThe Business Economic Outlook Forum providesan excellent base of knowledge for the BRD to con-duct local, national, and international research fora diverse set of clients. In addition to providingcompanies and state agencies with information tohelp them make better-informed business and pol-icy decisions, this research provides the BRD withexpertise in a number of areas. Through a varietyof research tools (direct mail surveys, telephonesurveys, focus groups, and personal interviews), theBRD has conducted research in the following areas:


87

Manufacturing• Investigated employment trends and issues,

• Identified management and operational issues,

• Prepared competitive intelligence and industryneeds assessment,

• Published industry and niche directories,

• Identified methods for service providers to pro-vide better service to manufacturers, and

• Determined the impact of key manufacturers onlocal economies.

Technology• Prepared overview of technology in Colorado;

• Conducted trend and issue analysis of biomed-ical, photonics, and renewable energy industries;

• Compiled industry and sector directories; and

• Estimated impact of technology on Colorado.

Health Care• Conducted customer satisfaction surveys of pub-

lic and private health plans;

• Conducted a comparative analysis of healthplans; and

• Prepared a study of the appropriate informationto provide clients using health plans.

State and Local Policy Decision-MakingOrganizations• Calculated fiscal impact of state agency on its

clients,

• Conducted customer satisfaction with stateagency programs,

• Prepared potential fiscal impact of retail store oncity economy,

• Identified city and county issues and trends withcity and county employees,

• Conducted customer satisfaction programs withfederal programs to mitigate employment reduc-tion because of defense layoffs,

• Calculated fiscal impact of agricultural compo-nent on county economy,

• Prepared analysis of issues and opinions regard-ing county growth trends, and

• Conducted public safety satisfaction/needsassessment study.

Other Areas• Conducted name recognition study for interna-

tional financial services company,

• Collected competitive intelligence and needsassessment to help company determine feasibilityof moving to Colorado,

• Prepared association membership satisfactionand needs assessment, and

• Identified processes for administrative and man-agement streamlining project.

General Economic Information• Prepared local Leading Economic Indicator

series, and

• Collected local economic data for various cityand county organizations.

Business Economic Outlook Forum• In addition to the outlook forum kickoff event in

Denver, targeted presentations of the businesseconomic forecast are typically made to morethan 60 local, regional, and national organiza-tions.

StaffRichard Wobbekind, DirectorGary Horvath, Marketing AnalystCindy DiPersio, Publications CoordinatorTerry Rosson, Program AssistantJulie Arnett, Research Assistant

For More InformationBusiness Research DivisionUniversity of Colorado at Boulder420 UCBBoulder, CO 80309-0420Telephone: 303-492-8227E-mail: [email protected]://leeds.colorado.edu/brd/


88

University of Colorado at Boulder: Services to Business and Industry

CU Business Advancement CenterThe CU Business Advancement Center (CU-BAC)supports the growth of technology industries inColorado through research, consulting, informa-tion, and networking services to businesses andorganizations. Assistance includes market defini-tion, feasibility studies, industry studies, businessand commercialization plans, needs assessments,and economic impact studies. The center special-izes in market research for new products and tech-nologies. Other recent projects include:

• Grant-subsidized services to help companiescommercialize products and services developedfrom Small Business Innovation Research(2002) and research that reduces pollution ordiverts waste (2003);

• Administrative and organizational support serv-ices for the Colorado Photonics IndustryAssociation and the Colorado EnvironmentalBusiness Alliance;

• Research on such topics as the target and emerg-ing industries for Colorado’s future economicgrowth, the economic impact of Small BusinessInnovation Research, and on the barriers andsolutions to construction waste;

• A no-cost business plan review and opportunityfor selected companies to present to investors ata “Socially Responsible” Investor Forum; and

• Editor and publisher of the cooperative,bimonthly newsletter, Technology Community.

CU Business Advancement CenterUniversity of Colorado at Boulder034 UCBBoulder, CO 80309Telephone: 303-554-9493Fax: 303-554-9605http://www.colorado.edu/cubac/

Robert H. and Beverly A. Deming Centerfor EntrepreneurshipFounded in 1996, the Robert H. and Beverly A.Deming Center for Entrepreneurship continues itsnational leadership status—with 2003 rankings of17th by U.S. News & World Report and 10th bybusiness faculty according to EntrepreneurMagazine for the graduate program, and 14th byU.S. News and World Report for the undergraduateprogram. The entrepreneurship Ph.D. program isranked among the top programs of its kind. TheDeming Center is also connected with CU-Boulder’s law and music entrepreneurship centers,and supports undergraduate and graduate studentsand faculty at CU-Boulder’s Leeds School ofBusiness. The center’s mission is to maximizelearning opportunities for entrepreneuriallyinclined student by

• Delivering a world-class entrepreneurship cur-riculum;

• Conducting rigorous academic research on top-ics relevant and useful to entrepreneurs;

• Creating a “connected learning environment”via established relationships with the entrepre-neurial community; and

• Being a comprehensive and valued resource forstudents, faculty, and the entrepreneur commu-nity.

The faculty and staff of the center strive to

• Have a profound impact preparing studentswith an enhanced entrepreneurial mindset topursue careers with new and emerging growthcompanies;

• Be a catalyst and supporter for research and dis-covery in the field of entrepreneurship;

• Encourage partnerships between the universityand its faculty, students, and practitioners whocreate, build, and operate entrepreneurial com-panies;

• Graduate well-educated entrepreneurialthinkers; and

• Significantly improve the probability of successfor those graduates who embark on entrepre-neurial ventures.

Kathryn Simon, DirectorRobert H. and Beverly A. Deming Center for

EntrepreneurshipUniversity of Colorado at Boulder419 UCBBoulder, CO 80309-0419Telephone: 303-735-4970http://leeds.colorado.edu/entrep/


89

Executive Development ProgramsExecutive Development Programs is part of apartnership between the Leeds School of Businessand the Division of Continuing Education at theUniversity of Colorado at Boulder. ExecutiveDevelopment Programs extend the resources ofthe Leeds School of Business to professional com-munities by offering certificate and short programsin executive and business education. In addition,we teach fundamental business courses to non-business undergraduates through the ProfessionalDevelopment Certificate offerings.

Executive Development Programs also offers busi-ness education taught by faculty that is customizedto a company’s needs. Clients can work with fac-ulty to develop specialized materials for courses.

Explore the opportunities that ExecutiveDevelopment Programs can offer both to you andyour organization!

Jill Terry, DirectorStephen Lawrence, Faculty ChairMatt McKeever, Assistant Program CoordinatorExecutive Development ProgramsUniversity of Colorado at Boulder178 UCBBoulder, CO 80309-0178Telephone: 303-429-2499E-mail: [email protected]://leeds.colorado.edu/cbe

Mid-America Manufacturing TechnologyCenter (MAMTC-Colorado)MAMTC-Colorado is a not-for-profit organizationdesigned to help small and mid-size manufacturersimprove business performance and profitability.Project directors located in Denver, Boulder, FortCollins, Colorado Springs, Durango, and GrandJunction provide on-site assessments to identifyprojects that improve a firm’s competitiveness.Projects focus on areas that can impact the bottomline, including process and quality improvement(lean manufacturing), plant layout, cost measure-ment, inventory control, product design, and soft-ware selection.

By tapping into a vast network of public and pri-vate resources, project directors help companiesmeet business challenges by delivering quality solu-tions at a fair price.

Supported in part by the NIST ManufacturingExtension Partnership, MAMTC also offers a num-ber of valuable services, including technical semi-nars, vendor and technology searches, producttesting, industry roundtables, and equipmentdemonstrations.

Elaine ThorndikeMAMTC-Colorado5353 Manhattan Circle, Suite 103Boulder, CO 80303Telephone: 303-499-9081Fax: 303-499-9219E-mail: [email protected]

University of Colorado Real Estate CenterThrough the dedicated efforts of a committedUniversity of Colorado faculty collegium, the CUReal Estate Center provides a world-class real estatecurriculum at both the graduate and the under-graduate levels that prepares students to be leadersin the real estate industry.

The Real Estate Center was created through theefforts of the Real Estate Council. The council con-sists of more than 270 real estate professionals con-tributing time, expertise, and financial support toeducate the next generation of industry leaders.The partnership between the university and theUniversity of Colorado Real Estate Council createsa dynamic and relevant dialogue that precipitatesmutually rewarding opportunities to further theresearch (theoretical and applied) of subjectsrelated to land use and its appurtenant topics.

The center provides a rewarding mentorship pro-gram designed to be mutually beneficial for boththe students and council members. In addition, thecenter develops meaningful internship opportunitiesfor students using the council network while requir-ing on-the-job experiences as part of the learningprocess for all students, with job placement oppor-tunities as the ultimate goal of the program.

Byron Koste, DirectorCU Real Estate CenterLeeds School of BusinessUniversity of Colorado at Boulder419 UCBBoulder, CO 80309-0419Telephone: 303-492-3258E-mail: [email protected]://leeds.colorado.edu/realestate/



90

Rocky Mountain Trade AdjustmentAssistance Center (RMTAAC)RMTAAC is an independent, nonprofit organiza-tion offering technical and professional assistanceto small and medium-size manufacturers adverselyaffected by import competition.

The center is staffed by professionals with extensiveprivate-sector experience in marketing, manage-ment, and engineering. RMTAAC project man-ager’s work closely with manufacturers to identifycost-effective strategies that enable them to com-pete with foreign producers.

In addition, project managers locate outside tech-nical consultants to implement projects thatrequire specialized expertise. Up to 50.0% of thetotal project cost is funded by the U.S. Departmentof Commerce.

Since 1981, RMTAAC has helped hundreds ofmanufacturers in a number of industries, includingcircuit board assembly, recreational equipment,material handling, testing equipment, buildingmaterials, apparel, and jewelry.

Edvard Hag, DirectorRocky Mountain Trade Adjustment Assistance

Center5353 Manhattan Circle, Suite 200Boulder, CO80303Telephone:303-499-8222Fax:303-499-8298www.taacenters.org

Richard M. Burridge Center forSecurities Analysis and ValuationThe mission of the Richard M. Burridge Center forSecurities Analysis and Valuation is to encourageand support the creation and dissemination of newknowledge about financial markets, with anemphasis on U.S. financial markets. The center

• Facilitates the exchange of ideas and knowledgeamong students, professional investment man-agers, finance scholars, policymakers, and theinvesting public;

• Identifies critical research issues in the theoryand practice of security analysis and valuation;and

• Encourages and supports vigorous qualitativeand quantitative research on topics relevant anduseful to money managers, valuation experts,and finance academics.

Michael Stutzer, DirectorLeeds School of BusinessUniversity of Colorado at Boulder419 UCBBoulder, CO 80309-0419Telephone: 303-492-4348E-mail: [email protected]://leeds.colorado.edu/burridge

Center for Sustainable TourismThe Center for Sustainable Tourism is the manage-ment unit for the tourism research and servicefunctions of the Leeds School of Business. It alsoserves as a “virtual think tank,” where students, fac-ulty, tourism industry representatives, communityleaders, and government officials, committed to theintelligent and orderly growth of tourism, cancome together to share their thoughts, concerns,ideas, research, and solutions.

The focus of sustainable tourism fits the state,national, and international tourism industry expe-rience, where the limelight is regularly focused onbalancing an expanding economy with social, cul-tural, and environmental integrity.

The ultimate goal of the CU Center for SustainableTourism is to provide students with the technicaland industry knowledge for their eventual role asleaders in the tourism industry. Students partici-pating in the center’s activities will be significantlybetter prepared to deal with current and futureissues facing development resulting from tourism.

Charles R. GoeldnerCenter for Sustainable TourismBusiness Research DivisionUniversity of Colorado at Boulder420 UCBBoulder, CO 80309-0420Telephone: 303-492-3725Fax: 303-492-3620E-mail: [email protected]://leeds.colorado.edu/

Services to Business and Industrycontinued from page 89

2004 - colorado department of education

Documents