DENVER—Economists and Gov. Bill Ritter predicted Wednesday that Colorado’s economy would fare better than others because of renewable and traditional energy, but a new survey shows businesses in the region aren’t sure how sure that will hold.
A monthly survey of supply managers in Colorado, Utah and Wyoming suggest that mining and oil and gas development have buoyed the region’s economy so far, but confidence is down for the months to come.
Ritter said the state is less vulnerable than the rest of the nation because it has diversified its economy to include renewable energy.
“The good news is that Colorado has been buffered to some extent,” he said.
Last week, Ritter announced a hiring freeze and ordered a halt to new construction because of the crisis roiling Wall Street and credit markets.
Among the projects affected are $30 million for full-day kindergartens and $50 million for other projects that were approved but not under way.
While Ritter spoke to investment bankers at the Denver Athletic Club Wednesday, about 75 people with picket signs gathered outside a Federal Reserve branch bank about eight blocks away to protest the $700 billion economic bailout plan now before Congress.
Protesters Charles and Myrta Anderson of Arvada said they hope lawmakers will include relief for those who have lost their homes, or are about to.
Their daughter, son-in-law and granddaughter moved in with the Andersons about a year ago after they lost their own home to foreclosure. The parents’ sun room is now crammed with shelves, boxes and a card table they cleared out to make room.
“We get to see it from our living room,” Myrta Anderson said of the financial crisis.
Regionally, an index devised by economist Ernie Goss to measure business conditions in Colorado, Utah and Wyoming stood at 56.3 in September, down slightly from 56.4 in September. Fifty and above indicates confidence that economy will expand.
However, the measurement of confidence six months out plunged from August’s 50.8 to 28.8, a record low since the survey started in 1994. The survey was conducted Friday and Monday as Congress considered the bailout.
Goss, an economics professor at Creighton University in Omaha, said growth in the mining and energy sectors has helped insulate the three states from the national crisis.
“The ripple effect hasn’t hit us yet,” said Goss. “It’s hard to see how we won’t see it. That’s where the long-term confidence comes into play.”
Goss’ Mountain States Business Conditions Index gauges the strength of the economy based on observations from managers in various sectors.
A forecast by Colorado State University economist Martin Shields released Wednesday predicted Larimer and Weld counties would add 4,000 jobs next year, a growth rate of about 1.9 percent.
Shields has predicted the two counties will add a total of 3,800 jobs this year, a growth rate of 1.8 percent, the slowest since 2003.
“We have a model right now that says this is going to happen and that’s partly based on the past, on what has happened,” said Shields.
“We’re in uncharted waters. We don’t know how deep this financial situation is, is this the tip of the iceberg, are we going to fix it? The answers to those questions are ultimately going to answer what happens in 2009,” he said.
