Economic OutlookKevin Duncan, Ph.D.

Professor and Senior Economist,Healy Center for Business and Economic Studies

• Economic data tells a story of two influences on local economy:– Growth in the national economy…

• Growth in Pueblo’s manufacturing industries.

– Poor performance of the Colorado economy…• Loss of jobs in Pueblo retail and service industries.

• “Muted recovery” from financial crisis.

National Economy at a GlanceSource: BLS

2011 January February March April

Change in Payroll Employment

68,000 235,000 221,000 244,000

Unemployment Rate

9.0 8.9 8.8 9.0

Inflation 0.4 0.5 0.5

U.S. Unemployment

• 13.5 million unemployed (March 2011)– 7.7 million in December 2007

• 6.3 million unemployed over 27 weeks (1.2 million in 2007)

Leeds Business Confidence IndexSurvey of Colorado Business Leaders

Colorado State Monthly Employment

Jan-00

May-00

Sep-00

Jan-01

May-01

Sep-01

Jan-02

May-02

Sep-02

Jan-03

May-03

Sep-03

Jan-04

May-04

Sep-04

Jan-05

May-05

Sep-05

Jan-06

May-06

Sep-06

Jan-07

May-07

Sep-07

Jan-08

May-08

Sep-08

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-112100000

2200000

2300000

2400000

2500000

2600000

2700000

March 2011: 2,440,000 Source: BLS

Unemployment Rates for Colorado and Surrounding States

State Unemployment Rate (March) Source: BLS

Colorado 9.2%

Wyoming 6.2%

Nebraska 4.2%

Kansas 6.8%

New Mexico 8.1%

Utah 7.6%

Pueblo County Employment

54000560005800060000620006400066000680007000072000

Monthly Employment (66,413 March) Source: BLS

Pueblo Employment Growth is UnevenSource: BLS

Industry Growth: Oct-2010 to Mar-2011

Mining, Logging and Construction Stable (at 3,200)

Manufacturing + 200 jobs

Trade, Transportation and Utilities - 300 jobs

Information Stable (at 700)

Financial Activities Stable (at 1,900)

Professional and Business Services +100 jobs

Educational and Health Services -100 jobs

Leisure and Hospitality -100 jobs

Other Services -100 jobs

Government +200 jobs

Unemployment Rates for Surrounding Counties (Source: CDLE)

County Unemployment Rate (March 2011)

Pueblo County 11.2%

Crowley County 10.8%

Otero County 10.4%

Las Animas County 10.3%

Huerfano County 12.9%

Custer County 7.5%

Fremont County 11.6%

State Average 9.2%

Pueblo County Sales Tax

Jan 07

Mar 0

7

May 07

Jul 0

7

Sep 07

Nov 07Jan 08

Mar 0

8

May 08

July 08

Sept 08

Nov 08Jan 09

Mar 0

9

May 09

Jul 0

9

Sept 09

Nov 09Jan 10

Mar 1

0

May 10

Jul 1

0

Sept 10

Nov 10Jan 11

Mar 1

1 -

200,000.00

400,000.00

600,000.00

800,000.00

1,000,000.00

1,200,000.00

1,400,000.00

1,600,000.00

Tax Distributed

Month of Taxable Activity: January 2007 to March 2011. Source: DOR

Is the worst behind us?

54000560005800060000620006400066000680007000072000

Low: 65,232 (Jan. 2011), Current 66,413 (Mar. 2011) source: BLS

Return of the Seasonal Employment Trend?

January-March Seasonal Trend

Pueblo County Employment Growth Source: BLS

2007 913 more jobs

2008 16 more jobs

2009 253 fewer jobs

2010 424 more jogs

2011 1,181 more jobs

Pueblo County Unemployment

Jan-00

Aug-00

Mar-0

1

Oct-01

May-0

2

Dec-02Ju

l-03

Feb-04

Sep-04

Apr-05

Nov-05

Jun-06

Jan-07

Aug-07

Mar-0

8

Oct-08

May-0

9

Dec-09Ju

l-10

Feb-11

0

2000

4000

6000

8000

10000Monthly Unemployment (8,659 Feb)

Source: BLS

Initial Claims for UnemploymentInsurance Source: CDLE

Aug-07

Oct-07

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

050

100150200250300

65 7399 86

199

143

83 8599 99

6889

6784

137

222 24

316

716

515

812

116

914

011

9 129 16

115

715

2 171

142

125

112 12

912

7 143

127

118

102

152

160

158

148

117

105

Initial Claims for Unemployment Ins (reference week of the 19th)

Pueblo ForeclosuresSource: DOLA

20 20 20 20 20 20 20 200

100200300400500

383

362

335 42

438

333

225

8 338 42

140

542

032

3 380

324

323 35

5

Pueblo

Foreclosure Filings

New Privately Owned Residential Building Permits Source: Census Bureau Less building, fewer loans into Pueblo

May Oct MarAug Jan Jun Nov Apr Sep Feb Jul DecMay Oct MarAug Jan Jun Nov Apr Sep Feb Jul DecMay Oct Mar2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0

50

100

150

200

250

MultipleSingle

Monthly for Pueblo County: January 2000 to March 2011

Pueblo’s Economic Outlook?

• Strengths: Local manufacturing employment and trend in initial claims for unemployment insurance.

• Weaknesses: High local unemployment and the local housing market.

• Threats: State budget cuts.• CU forecast (December 2010):

“Worst is over- maybe”.• Momentum of US economy will lift Colorado and

Pueblo.• But, it will take time.

Pueblo Retail Sales

0500

10001500200025003000350040004500

2320

.1

2370

.3

2504

.1

2601

.8

2792

.6

2912

.8

3168

.8 3823

.3

3909

.6

3732

.6

Annual Retail Sales ($ millions)

Colorado and Pueblo Unemployment

20

2

4

6

8

10

12

14

3.95.2

7.1 7.5 7.56.9

5.74.9

6.1

8.7 9.6

11.5

2.83.8

5.6 6.1 5.6 5.14.3

3.74.8

8.3 8.9 9.3

PuebloCO

Annual Unemployment Rates

Pueblo Employment Trends

• January, 2011:– Employment = 65,232– Unemployment Rate = 11.8%

• March, 2011:– Employment = 66,413– Unemployment Rate = 11.2%