March survey results at a glance:
· Business confidence rises for month.
· Inflation gauge climbs back into inflationary territory.
· Leading economic indicator points to healthy growth for first half of 2011.
· Export orders show healthy upturn.
Denver, CO – For the seventeenth straight month, the overall index for the Mountain States region, a leading economic indicator for the three-state area of Colorado , Utah and Wyoming , advanced above growth neutral 50.0. Surveys of supply managers over the past several months indicate that a rapidly improving manufacturing sector assisted by strong exports and an expanding energy sector are improving economic growth prospects for the next six months.
Overall Index: The overall index, or Business Conditions Index which ranges between 0 and 100, rose to 61.2 from February’s 59.5 and well up from January’s 56.2. An index of 50.0 is considered growth neutral. The Business Conditions Index is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time. This is the same methodology used by the national Institute for Supply Management.
“An expanding energy sector and the export of manufacturing goods continue to be important sources of growth for the region,” 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).
Employment: The March employment index climbed to 55.6 from 54.6 in February. “After many months of rising new orders, sales and productivity, firms in the region have begun to hire more rapidly. I expect this trend to continue and strengthen in the months ahead,” said Goss.
“However, it will take many months for the region to recapture jobs lost during the recession. From the beginning of the recession in December 2007 until March of last year the region lost more than 233,000 jobs. Over the past year, the region has recovered approximately 13 percent of those lost jobs. Our surveys over the past several months indicate that the region will add another 100,000 by the end of 2011 leaving the region down more than 100,000 jobs, or 3.0 percent, since beginning of the recession,” reported Goss.
Wholesale Prices: The regional price gauge soared to an inflationary 86.9 from February’s 73.0. The prices-paid index, which tracks the cost of raw materials and supplies, has now moved above growth neutral in twenty-one of the last twenty-two months. “We continue to record unacceptably high inflationary pressures at the wholesale level. The upward pressures in prices will be further exacerbated by disruptions of supplies and products from Japan .”
“Additionally, the Federal Reserve’s record low short-term interest rate policy and the Fed’s policy of buying long-term U.S. Treasury debt, termed quantitative easing 2 (QE2), will continue to contribute to higher inflationary pressures. Over the past three months, U.S. wholesale prices have advanced at an annualized pace of more than 15 percent. Surveys of supply managers, both in our region and nationally, indicate that this elevated pace will continue at least through the summer of this year,” reported Goss.
Business Confidence: Looking ahead six months, economic optimism, captured by the confidence index, advanced to 61.9 from 56.2 in February. “Despite higher commodity prices, unacceptably elevated unemployment rates, and Japanese supply disruptions, supply managers remain upbeat in their economic outlook,” reported Goss.
Inventories: Supply managers in the three-state region added to inventories of raw materials and supplies for the month at a faster pace with a reading of 59.1 from 58.0 in February. “This is the sixteenth straight month that we have recorded inventory growth. As a result of rising economic confidence, firms in the region continue to expand inventories in anticipation of growing sales in 2011,” said Goss.
“This month we asked supply managers how they expected the Japanese tragedy to affect their purchases of supplies and inputs. Approximately 36 percent of respondents expected little or no impact on prices of purchases while one-third anticipated price increases between 2 percent and 10 percent resulting from the earthquake and tsunami.”
In terms of deliveries, approximately 28.6 percent expect significant delays in obtaining supplies while approximately one-third anticipate little or no impact on delivery speed stemming from the Japanese disaster. The remaining supply managers anticipate only minor delays,” said Goss.
Trade: An expanding global economy is pushing trade higher. Aided by a cheap dollar making U.S. goods more competitively priced abroad, March’s new export orders index stood at a strong 62.6, but down from 68.6 in February. The region’s import reading declined to 57.2 from 57.7 in February. “The global economic expansion combined with a cheap dollar continue to stimulate exports,” said Goss.
Other Components: Other components of the February Business Conditions Index were new orders at 67.6, up from 64.4 in February; production or sales at 67.2, up from 64.3; and delivery lead time at 56.3, up from 56.0 in February.
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: The state’s leading economic indicator, based on a monthly survey of supply managers in the state, moved higher for March. The March overall index, termed the Business Conditions Index, advanced to a healthy 59.6 from 57.1 in February. Components of the Business Conditions Index for March were new orders at 77.7, production or sales at 77.9, delivery lead time at 48.4, inventories at 40.3, and employment at 53.5. “From the beginning of the recession in December 2007 until March of last year Colorado lost approximately 133,000 jobs. Over the past year, the state has recovered approximately 10 percent of those lost jobs. Our surveys over the past several months indicate that the region will add another 60,000 by the end of the first quarter of 2012 leaving the region down almost 60,000 jobs, or 2.8 percent, since beginning of the recession,” reported Goss.
. Utah: The state’s overall index, or Business Conditions Index, a leading economic indicator, once again remained above growth neutral 50.0. Based on the monthly survey of the membership of NAPM -Utah (www.napmutah.org), the overall index was unchanged from February‘s 59.8, but up from 55.9 in January. Components of the Business Conditions Index for March were new orders at 64.6, production or sales at 64.5, delivery lead time at 57.7, inventories at 58.7, and employment at 53.6. “From the beginning of the recession in December 2007 until March of last year Utah lost approximately 88,000 jobs. Over the past year, the state has recovered approximately 17 percent of those lost jobs. Our surveys over the past several months project that the state will add another 34,000 by the end of the first quarter of 2012 leaving the state down approximately 40,000 jobs, or 3.6 percent, since beginning of the recession,” reported Goss.
Wyoming: The state’s leading economic indicator from a survey of supply managers in the state climbed above growth neutral for the seventeenth straight month. The index, termed the Business Conditions Index, expanded to 69.0 from 66.6 in February. 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 first half of 2011. Components of the overall index for March were new orders at 76.0, production or sales at 73.1, delivery lead time at 55.8, inventories at 72.1, and employment at 68.1. “From the beginning of the recession in December 2007 until March of last year Wyoming lost approximately 12,000 jobs. Over the past year, the state has recovered approximately 20 percent of those lost jobs. Our surveys over the past several months project that the state will add grow jobs between now and the end of the first quarter of 2012 sufficient to bring the state’s employment level to pre-recession levels,” reported Goss.
April survey results will be released on May 2.
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.
