July survey results at a glance:
· Leading economic indicator points to second half growth.
· Hiring improves with expected layoffs down significantly.
· Price gauge points to reduced inflationary pressures in pipeline.
Denver, CO – For a tenth straight month, the overall index for the Mountain States region, a leading economic indicator for the three-state area, moved above growth neutral 50.0. The overall index, or Business Conditions Index, for July climbed to a healthy 58.6 from 58.3 in June and 57.9 in May. The index is pointing to improving economic conditions for the three-state region composed of Colorado, Utah and Wyoming in the months ahead.
“On an annualized basis, the region has added jobs at a 1.3 percent pace, equaling that of the rest of the nation. However, businesses in the region continue to increase output primarily by expanding the hours worked for current employees. While I expect job growth to improve in the second half of 2010 for the region, the upturn will be quite timid by historical standards,” Goss Institute for Economic Research Director Dr. Ernie Goss said today. The Goss Institute conducts the monthly survey for Supply Management Institutes in the three states comprising the Mountain States region. Goss also directs Creighton University’s Economic Forecasting Group and is the Jack A. MacAllister Chair in Regional Economics (http://www.ernestgoss.com/aboutus.html).
The July employment index rose to a much improved 61.1 from June’s 56.7. This month The Goss Institute asked supply managers about the hiring prospects for their firm over the next six months. Over one-third, or 36 percent, expects increases in hiring in the second half of 2010, while only 11 percent anticipate layoffs at their company in the next six months. In August of last year, 44 percent of supply managers indicated that they expected layoffs in the coming six months.
After rising significantly, the regional price gauge slipped to a still inflationary 65.4 from 76.0 in June. The prices-paid index, which tracks the cost of raw materials and supplies, has now moved above growth neutral in thirteen of the past fourteen months. National and regional surveys of supply managers over the past several months indicate that despite record-low interest rates from the Federal Reserve, inflationary pressures in the pipeline are cooling. “While I think that it is too early to ignore the threat of rising inflationary pressures and asset price bubbles, it is clear that the Federal Reserve will not move to raise interest rates before the end of 2010,” said Goss.
Looking ahead six months, economic optimism, captured by the July confidence index, climbed to 62.6 from June’s 55.4 and May’s 58.7. “After bottoming out in 2009, improvements in durable goods manufacturing and mining related firms have boosted the economic outlook six months down the road among supply managers in the Mountain States region,” said Goss.
Trade numbers improved for July. The new export orders index rose to 52.9 from June’s 46.1. July’s imports climbed to 60.1 from 54.8 in June.
As another measure of economic confidence, supply managers in the three-state region added to inventories of raw materials and supplies for the month. The July inventory index expanded to 67.4 from June’s 57.6. “This is the eighth straight month that we have recorded inventory restocking after more than one year of inventory reductions. The growth in inventories has been a positive and significant factor pushing the regional economy higher. However, we need to see an increase in the pace of consumer buying before we can be assured that the economy will not dip back into a recession. Inventory buildups are not the basis for sustained economic growth,” said Goss.
Other components of the July Business Conditions Index were new orders at 53.3, down from June’s 55.7; production or sales at 55.8, down from 61.0; and delivery lead time at 55.6, down from 57.6.
The Institute for Supply Management, formerly the Purchasing Management Association, has been formally surveying its membership since 1931 to gauge business conditions (www.ism.ws). The Goss Institute uses the same methodology as the national survey. The overall index, referred to as the Business Conditions Index, ranges between 0 and 100. An index greater than 50 indicates an expansionary economy over the course of the next three to six months.
The Creighton Economic Forecasting Group has conducted the monthly survey of supply managers in Colorado , Utah , and Wyoming since 1994 to produce leading economic indicators of the Mountain States region. The Goss Institute assumed operation of the survey in August of 2008, working with NAPM-Utah (www.napmutah.org) and NAPM-Western Wyoming (http://www.ism.ws/sites/westwyoming/index.htm).
Colorado: For the tenth straight month, the state’s leading economic indicator rose above 50.0. However, the July index, based upon a survey of supply managers in the state, sank to 56.2 from June’s 68.4 and May’s 56.8. Components of the overall index for July were new orders at 53.2, production or sales at 56.7, delivery lead time at 56.6, inventories at 54.0, and employment at 60.2. “For the month, durable goods producers more than offset somewhat weaker economic conditions among non-durable goods manufacturers. Non-durable producers in the state have increased output by expanding hours worked rather than hiring new workers. Telecommunications firms in the state continue to experience weak business conditions,” said Goss.
Utah: The state’s Business Conditions Index, a leading economic indicator, once again climbed above growth neutral 50.0. Based on the monthly survey of the membership of NAPM-Utah (www.napmutah.org), the overall index advanced to 58.5 from 57.9 in June. Components of the overall index for July were new orders at 54.6, production or sales at 63.4, delivery lead time at 57.1, inventories at 60.9, and employment at 56.7. “Durable goods producers are growing output and employment in the state. Non-durable manufacturers, on the other hand, have limited their hiring even with increases in new orders and sales,” said Goss.
Wyoming: The state’s leading economic indicator from a survey of supply managers in the state climbed above growth neutral for a ninth straight month. The Wyoming Business Conditions Index for July increased to 57.6 from 57.2 in June and 55.9 in May. Supported by NAPM-Western Wyoming (http://www.ism.ws/sites/westwyoming/index.htm), surveys over the past several months point to an expanding state economy for the second half of 2010. Components of the overall index for July were new orders at 49.5, production or sales at 48.3, delivery lead time at 58.8, inventories at 67.3, and employment at 64.0. “Durable goods producers in the state along with firms in the state’s large mining and natural resources industry are reporting upturns in business activity. This will continue to spill over into the rest of the state economy for 2010,” said Goss.
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Prairie Gateway re-branded to Victory Crossing {Commerce City}
Commerce City "We need to be sure that we are not left behind in ED..."
Will we ever see Development @ the Prairie Gateway site in Commerce City, CO??? It has been years since the Commerce City Civic Center and Rapids stadium have been built and still no economic development. I guess patience is really a virtue.
