First, the bad news: Colorado appears to have joined the rest of the country by officially slipping into a recession, according to Tom Dunn, the author of new research on Colorado’s economy from the University of Denver’s Center for Colorado’s Economic Future (CCEF).
“I believe Colorado is in recession based on the recent loss of jobs and weak consumer spending,” says Dunn, senior economist at CCEF who’s been watching Colorado’s economic cycles and related economic data for 35 years.
“Although these declines are only a few months old, the nationwide trend and poor outlook will extend to Colorado and prolong state losses.”
Dunn says there’s no technical benchmark to determine recessions for states, but adds employment and state sales tax collections are typically good indicators of the economy’s health.
Relief isn’t likely until the second half of 2009 and possibly into the first quarter of 2010, Dunn predicts.
The good news is, after the economic storm has passed Dunn believes Colorado is poised well for the long-term. Why? Two words: alternative energy.
“Much of Conoco’s [ConocoPhillips, the energy giant] plans revolve around the alternative energy sector … [and] Vestas [a wind power company] has built or announced plans for three manufacturing plants in Colorado,” he says. “And the National Renewable Energy Laboratory in Golden is the nation’s leading research facility in renewable energy technologies. The critical mass for Colorado being a leader in renewable energy is already in place and will increase over time.”
CCEF Director Charlie Brown says Dunn did an “excellent job” of interpreting what the recession portends for Colorado’s economy. “As the recession unfolds in Colorado, it will impact some regions and local governments more than others,” Brown says.
Brown adds that CCEF, which is an independent, nonpartisan organization that conducts research on matters related to Colorado’s fiscal health, will be exploring the effects of the recession on Colorado’s local governments and the implications and challenges for policymakers.
The CCEF report analyzes the significance of Colorado’s job losses, rise in unemployment and declining sales tax revenues.