Transcript Percent Change By Year (1995-2008)

Southwest Business Forum
January 9, 2009
Fort Lewis College’s 17th Annual
Focus on Our Future:
Business and Economics
Sponsored by Wells Fargo
Investment Advice
If you had purchased $1,000 of AIG stock one year ago, you would
have $42 left.
With Lehman, you would have $0.60 left.
With Fannie or Freddie, you would have less than $5 left.
But if you had purchased $1,000 worth of beer one year ago, drank all
of the beer, then turned in the cans for the aluminum recycling
REFUND, you would have had $214.
Based on the above, the best current investment advice is to drink
heavily and recycle.
It is always nice to know some investments still hold their value over
time.
Wall Street Sympathy

Back in the 1929 Financial Crash it was said that some Wall Street
Stockbrokers and Bankers JUMPED from their office windows and
committed suicide when confronted with the news of their firms and
clients financial ruin . . .

Many people were said to feel sorry for them . . .

In 2008 the attitude has changed somewhat:
Beeeeep….
The Region 9 Economy
Region 9 Labor Force
Source: U.S. Census Bureau
Region 9 Labor Force Growth Rates
Source: U.S. Census Bureau
Region 9 Per Capita Income
Source: U.S. Department of Commerce, Bureau of Economic Analysis,
Regional Economic Information System. Most recent data available.
Region 9 Per Capita Income: Percentage of Colorado
Source: U.S. Department of Commerce, Bureau of Economic Analysis,
Regional Economic Information System. Most recent data available.
Region 9 Growth Per Capita Income
Source: U.S. Department of Commerce, Bureau of Economic Analysis,
Regional Economic Information System. Most recent data available.
Region 9 Unemployment Rate
Source: U.S. Department of Commerce, Bureau of Economic Analysis,
Regional Economic Information System. Most recent data available.
The La Plata County Economy
Tourism

Tourism Includes:
1.
2.
3.
4.
5.
Airport Passengers
Train Ridership
Mesa Verde Visitors
Lodger’s Tax Collected
Skier Boarder Visits
Airport Passenger Activity (enplanements)
Percent Change By Year (1995-2008)
18%
Percent Change
20%
15%
12%
12%
10%
8%
5%
5%
2%
4%
6%
2%
1%
0%
-5%
1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 20071996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-10%
-8%
-11%
-15%
-13%
Year
Source: Durango - La Plata County Airport
Train Passenger Activity
Percent Change By Year (2001-2008e)
24.7
Percent Change
30
20
10
3.3
0.5
0
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
-10
-1.2
-20
-0.5
-12.1
-30
-40
-32.8
Year
Source: Durango & Silverton Narrow Gauge Railroad
e = estimate
Percent Change
Mesa Verde Visitors
Percent Change By Year (1995-2008e)
20
14
15
10.6 11.8
9.6
10
5.2
2.4
2.1
5
1
0
2007-2008
-51995-1996 1997-1998 1999-2000 2001-2002 2003-2004 2005-2006
-2.9
-10
-3.9
-15 -6.9
-20
-25
-22
-30
-28
-35
Year
Source: National Park Service Public Use Statistics Office
e = estimate
Lodger’s Tax Revenue (Durango)
Percent Change By Year (2003-2008e)
12.0
10.7
10.0
P
e
r
c
e
n
t
C 8.0
h
a
6.0
n
g
4.0
e
8.4
7.0
6.7
2006-2007
2007-2008
4.8
2.0
0.0
2003-2004
2004-2005
2005-2006
Year
Sources: City of Durango (unadjusted numbers)
e = estimate
Skier/Boarder Visits
Year
United States
(millions)
Purgatory (DMR)
2000/01
57.3
322,000
2001/02
54.4
251,000
2002/03
57.6
236,000
2003/04
57.1
268,000
2004/05
56.9
278,000
2005/06
58.8
211,000
2006/07
55.0
252,000
2007/08
60.5
278,000
Sources: National Ski Association and Annual Reports
Retail Sales
(Adjusted for Inflation)

An indicator of tourism activity as well
as population growth.
La Plata County Retail Sales (adjusted $s)
Percent Change – Semi-Annual (2003-2008)
Source: Colorado Department of Revenue
2009 Tourism and Retail Outlook

Tourism: Dependent upon discretionary spending

Retail: Reflection of national economy
Agriculture

Includes Calf Prices and Alfalfa Hay
Prices – adjusted for inflation.

A better measure would be sales, but
these numbers are not available.
Alfalfa Hay Prices
Percent Change By Year (1995-2008e)
35.9
Percent Change
40
30
20
16.9 18.5
15.7
12.4
10
3.3
12.3
2.8
0
-10
-20
1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 20071996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-13.2
-0.3
-1.4
-9.2
-20.3
-30
Year
Source: U. S. Department of Agriculture - Economics, Statistics and Market
Information System
e = estimate
Calf Prices, Adjusted Dollar Value per Cut Weight
Percent Change By Year (1995-2008e)
Percent Change
50
40.1
40
30
18.3
20
10
12.7
12.4
5.7
9.8
0
-10
-20
-30
1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 20071996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-5.4
-14
-3.85 -9.9 -10.9
-5
-23
Year
Source: U. S. Department of Agriculture - Economics, Statistics and Market
Information System
e = estimate
2009 Agriculture Outlook

Higher volatility in commodity prices
 Hedge
fund deleveraging
 Corn-based ethanol

Decreased prices in calf prices
 Not
passing input costs to consumer
 Ranchers/farmers not buying calves with increased feed
costs
Industrial Kilowatt-Hours

Used as an indicator of industrial activity in
the county.

Most industrial usage of electricity in the
county is to compress natural gas for
transmission through gas pipelines
Industrial Kilowatt Hours
Percent Change By Year (1995-2008e)
60.0
50.9
50.0
Percent Change
40.0
30.0
20.0
10.0
9.1
10.2
6.9
6.6
6.5
7.0
2.0
0.5
0.0
-10.0
1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 20071996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-6.3
-7.3
-2.3
-20.0
Year
Source: La Plata Electric Association Inc.
e = estimate
-2.3
2008-2009 Observations for Oil & Gas


Given the current regulations in the oil & gas
industry, the region is producing natural gas near
full capacity
High political uncertainty
Fort Lewis College
Enrollment

The college stabilizes the economy
because of higher enrollment in the
fall and winter months. This offsets
some of the decline in tourism during
this time period.
Fort Lewis College Enrollment (Fall)
Percent Change By Year (1995-2008)
8.0%
6.2%
Percent Change
6.0%
4.0%
2.0%
3.6%
2.1%
1.0%
0.2%
0.7%
0.0%
-2.0% 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 20081996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-2.1%
-1.6%
-4.0%
-1.0%
-0.4% -2.8%
-3.8%
-4.80%
-6.0%
-5.8%
-8.0%
Year
Source: Fort Lewis College
2009 Fort Lewis College Outlook

Increased admission standards at FLC
 Comparable
with UC-Boulder and CSU

Slight dip in enrollment last several years

Intermediate-term goal is 5,000 students

Increased number of applications and lower
admission rate
Residential Real Estate
% Change in Median Price of
Durango In-Town Single-Family Home
Average Days on Market & Number of
Transactions In-Town Durango
Median Home Price of
Condos/Town Homes In-Town Durango
Days on Market & Number of Transactions
Condos/Town Homes Durango In-Town
Building Permits

This indicator uses the adjusted
dollar valuation of the properties for
which permits were issued—thereby
measuring the dollar value (as
assessed) of new construction in La
Plata County.
Building Permits (Construction)
Percent Change By Year (2002-2008)
Sources: La Plata County Building Department, City of Durango
Planning and Community Development Department
Building Permits (Construction Value)
Percent Change By Year (2002-2008e)
40%
Percent Change
30%
28%
25%
20%
10%
0%
-10%
-20%
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
-7%
-19%
-24%
-30%
-40%
-39.60%
-50%
Year
Sources: La Plata County Building Department, City of Durango
Planning and Community Development Department
e = estimate
Durango Price-to-Rent Analysis
Durango Comparables Price-to-Rent
2009 Real Estate Outlook





Nation is absorbing the worst real estate correction
since the Great Depression
National builders anticipate a bottom in early 2010
Single-family homes = healthy correction
Condos/Town Homes = less healthy correction
Building permits = significant decline
Bank Deposits

An important indicator of the economic
health of the community.

Also an indicator of the ability of local
banks to make loans to consumers and
business borrowers.
Bank Deposits
(Unadjusted)
June 30th
Deposits
Year to Year %
Change
2002
$615,000,000
2003
2004
$702,000,000
$778,000,000
+14.2
+10.8
2005
2006
2007
$874,000,000
$1,020,000,000
$1,034,000,000
+12.3
+16.7
+1.4
2008
$1,097,000,000
+6.0
Source: Federal Deposit Insurance Corporation
Inflation
Durango Price Index (DPI)

Monitors the change in the price of goods
and services in our region

Durango Price Index
 Adjust
Denver CPI for Durango housing and
income levels
 Assumes similar other expenditure patterns as
Denver consumers
Durango Price Index versus Denver CPI
Annual Inflation Rate: Durango vs. Denver
2009 Inflation Outlook

Durango housing rents will continue to increase

Volatility in commodity prices

Decreased consumer spending
Our Web Address:
http://soba.fortlewis.edu/econoweb/
Thank You!