Tom Locke
Denver Business Journal
July 19, 2004

Colorado business owners want to know: When will the economy improve?

Some already are seeing improvement. But at the same time, in the second quarter Colorado posted more business bankruptcies than any quarter since the third quarter of 1993.

Colorado is commonly perceived as lagging the national economic recovery. But is that so? And what does it mean to be lagging, and how much time is in the lag?

The Denver Business Journal surveyed four economists, and all agreed there is a lag. And the good news is they generally agree that Colorado's economic recovery has begun. They tend to measure that by job creation, particularly because there is no timely measure of state gross domestic product.

Their opinions differ about the length of the lag for the recovery, ranging from two months to a year, depending on how the lag is measured.

Why does Colorado lag the nation in recovery?

The economic downturn affected the state more than the nation because of Colorado's high concentration in sectors that were hit particularly hard: telecommunications, high tech and tourism.

Though metro Denver had a diverse high tech/telecom group of companies, "all of them got walloped at the same time. We went down a lot farther than other communities," said Patty Silverstein, president of Littleton-based economic consulting firm Development Research Partners Inc.

Similarly, Colorado's exit from the late-1980s recession lagged the nation's because of high concentration in particularly hard-hit industries at the time: oil and gas, real estate and agriculture, Silverstein said.

Nancy McCallin, chief economist for Gov. Bill Owens, said via e-mail the "job losses in advanced technology accounted for the majority of job loss in the state, and the events of Sept. 11, 2001, caused the tourism and travel industries to struggle."

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