Economic Overview: Colorado Springs

Military increases boost the area’s expectations for 2008

The city of Colorado Springs saw a successful 2007 in job creation, with 2008 shaping up to be another good year, despite the news of a failing housing market and increased fears of a national recession. The construction industry fared well in the city during 2007 with the completion of major projects like the renovation of the Colorado Springs Fine Arts Center, the opening of a new corrosion control facility at Peterson Air Force Base and the Colorado Springs Metro Interstate Expansion. New projects in store for 2008 include the Southern Delivery System, a regional water delivery project that will use the storage capacity of the Pueblo Reservoir to deliver water to the Pikes Peak region. And, with the Colorado Springs Downtown Partnership’s 10th Anniversary, comes a plan to facilitate revitalization and new development.

Colorado Construction magazine talked to the Colorado Springs Economic Development Corp. about what the industry can expect to see in 2008.

Colorado Construction magazine: What is the current industry base in Colorado Springs?

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Colorado Springs Economic Development Corp.: In 2007, we announced 2,462 new EDC-assisted primary jobs, which exceeded our goal of 2,400. Of the reported jobs associated with relocating or expanding local companies, 53% were in EDC’s target sectors of aerospace, bioscience, data storage, homeland defense, national nonprofits/sports organizations, renewable energy and software. Additionally, the U.S. Army has selected Fort Carson to receive an additional brigade combat team to supplement the four brigades already assigned to the Mountain Post.

The expansion is part of the Army "Grow the Force" initiative, under which is the standing up six new brigades over the next five years. In an eight-year period, 2005 to 2013, Fort Carson will have nearly doubled in size with the expected end-state to be nearly 30,000 troops. The BCT will result in a tremendous economic boost for southern Colorado’s economy and could infuse more than $50 million annually into the Pikes Peak region and more than $500 million annually in new construction expenditures.

CCM: Have you seen industry shifts in the county?

CSEDC: For the past several years, Colorado Springs has been a very attractive location for customer service centers. Companies place high value on the skilled workforce, positive business climate and central location. They require educated people, often with sales experience. Our Local Industry Program has also been holding a series of events specifically for the 550 primary employers in El Paso County. To date, three forums have been held and over 50 companies have attended. The purpose of these forums is to: 1. understand the issues that impact businesses, both specifically and on a broader business climate level; 2. determine if these companies are planning to expand; and 3. connect companies with community leaders such as the city council, utilities and workforce and educational representatives.

CCM: How is the construction industry faring in the Colorado Springs area?

CCEDC: In 2008, commercial markets should experience a year similar to 2007. Expect a slight downturn in leasing and absorption numbers due to less available space in most major sectors. Home prices remain reasonable, commercial vacancy rates are down; lease rates for office, industrial and retail are up only incrementally. Modest and sporadic new industrial development was due to concern that current lease rates do not yet support new development. Plant closings such as Intel, where 800 high-tech jobs were eliminated, will plague the Colorado Springs manufacturing sector for several years. But, we should expect retail market growth primarily in northeast Colorado Springs and Monument and a renewed interest in Fountain due to the anticipated arrival of 10,000 Fort Carson troops.

CCM: What is the economic outlook for the rest of 2008?

CCEDC: Despite the challenges associated with the national economy and the housing market, there is a great deal of optimism in our job attraction, expansion, retention and creation efforts and every indicator points to 2008 as an even better year than 2007.

*Some responses came from CCEDC’s January 2008 “Report on the Economy.”

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