Colorado State University - Pueblo School of Business releases economic survey results
PUEBLO – A recent study conducted by the Healy Center in the Hasan School of Business at Colorado State University-Pueblo in conjunction with regional economist Tucker Hart Adams indicated that Pueblo is outperforming other cities in Colorado by most measures and has among the lowest costs of living in the nation. Area businesses reported faring better in the last six months and feeling optimistic about their businesses and the economy in general.
Adams, the foremost expert on the Colorado economy, surveyed 1,200 members of the Greater Pueblo and Latino Chambers of Commerce on the Pueblo business outlook. She presented the results today (February 11) as part of the Greater Pueblo Chamber’s monthly luncheon. The survey was funded entirely by donations from the Pueblo Community.
The respondents primarily were from small businesses with two-thirds of respondents coming from companies with less than 50 employees and only 8.3 percent employing more than 250. Among survey respondents, 92.6 percent are members of the Pueblo Chamber of Commerce, 60.2 percent are members of the Latino Chamber, and 37 percent are members of the Pueblo West Chamber. Most survey respondents belonged to two chambers, and many are members of all three.
Business Confidence Survey
Respondents were more upbeat about the current situation in their own business than about the Pueblo economy in general, with 32 percent saying conditions for their business were better than six months ago versus only 17.8 percent saying that was true for the Pueblo economy. The businesses are relatively optimistic about the next six months, with 57.7 percent expecting business to be better than it is currently.
Only 21.2 percent of survey respondents reported reducing the workforce during the recent downturn, while 16.3 percent actually added jobs. Over the next six months, 19.4 percent plan to increase hiring, while 9.7 percent saw the necessity for cutting additional jobs.
It appears the prices of goods and services have remained unchanged over the last six month. The majority of survey respondents, 61.2 percent, said their prices had remained unchanged over the past six months and that more than 82 percent planned to leave prices steady over the next six months. Just over 13 percent raised prices during the recession while more than 15 percent plan to do so in the first half of 2010. The soft economy brought price reductions from 25.5 percent of respondents, but only two percent planned to lower prices as the economy strengthens. Many respondents checked all three boxes, suggesting that what they did/will do with prices will vary by product.
Pueblo businesses plan to be cautious with capital spending and borrowing in the first half of 2010, even though the majority expects their business to be better off than it is today. The bulk of respondents, nearly 55 percent, plan to keep capital spending levels unchanged, with only three percent planning to borrow more in the first half of 2010. About one third plan less capital spending and borrowing. Several respondents who said their borrowing plans would remain unchanged pointed out that they don’t borrow now and don’t plan to over the next six months.
The final set of questions referenced the economic stimulus package and its impact on Pueblo. Almost 55 percent of respondents did not expect the economic stimulus package to affect their business, although 13.7 percent reported it had helped and 16.7 percent thought it would have an impact in 2010.
Pueblo Economic Study
The study of the Pueblo economy which accompanied the survey identified that manufacturing is no longer Pueblo’s primary employment base, making Pueblo much more like the rest of the state. Just 14.1 percent of Pueblo jobs are in the goods producing sector, while the state’s percentage stands at 14.2 percent. Education and health services represent 17 percent of the Pueblo workforce compared to 10.7 percent for the state.
Back in 1982, Pueblo’s unemployment rate peaked at 19.7 percent, which was twice the Colorado and national levels. At that time, CF&I Steel, the city’s major employer, accounted for 30 percent of the city’s payroll. When the company announced it was discontinuing basic steel making operations, four blast furnaces were idled, 2,800 workers were laid off and 4,000 jobs were lost. Three years later the pipe mill was closed. Employment at the mill had fallen from 9,000 in 1957l to 761 by 2000.
The study notes that Pueblo is outperforming other cities in Colorado by most measures. Pueblo’s employment decline in 2009 was well below that of Denver, Colorado Springs, and the state as a whole. Pueblo’s retail sales have contracted less than across the state. Housing permits in Pueblo declined minimally in 2009, while the other areas of the state experienced reductions of 40-55 percent. The study also confirmed that Puebloans earn less than the rest of the state. While Pueblo’s per capita income of $28,357 in 2008 ranked it 331st among the nation’s 366 metropolitan statistical areas, it ranked in the top quintile of income growth for the nation that year and had the lowest cost of living in the U.S.
The study of the Pueblo economy will be updated annually by the Healy Center and the business confidence survey will be conducted quarterly. Future updates will be made available on the Center’s web site. Those interested in obtaining a copy of the full report and survey can visit www.hsb.colostate-pueblo.edu/puebloeconomicreport or contact the Hasan School of Business at 719-549-2142.