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Construction losses hit Colorado hard

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Like a hammer driving down hard on the nail, the last few years of the recession have taken a serious toll on the state’s economy.

A new report just issued by Gary Horvath and his Broomfield-based company Business and Economic Research at examines the volatility of the construction sector, pointing out that its “peaks are often more exaggerated and the troughs more severe.”

Colorado’s construction businesses, including residential, commercial and non-building (infrastructure such as roads and utilities) now have suffered declines in employment from 2006 to 2009.

And when you realize, as Horvath explains, that even despite the recession’s effects, Colorado has a higher concentration of construction works (called the “location quotient” in economist speak) than other parts of the U.S., then the job losses have hit especially hard.

Colorado construction employment now has declined to 7.2 percent, or about 131,000 jobs in 2009, from 8.9 percent, or 167,647 jobs, in 2006.

Fewer construction jobs, of course, also smacked a number of manufacturing sectors that produce materials for builders and contractors. These include everything from asphalt to paint to HVAC equipment. Colorado actually has five seasons, Horvath reminds us. Winter, spring, summer, fall, and “cone” season.

The headlines of Colorado bank failures often fostered by a heavy reliance on commercial lending prior to the U.S. recession remind us that numerous professional services depend heavily on the health of the construction industry. The list of those losing high-paying jobs goes on with insurers, real estate agents, appraisers and mortgage loan brokers.

The category of financial employment related to construction has lost nearly 8,000 jobs since 2006, Horvath’s figure show.

One anomaly is that the category architects and engineers, “thought to be a leading indicator of economic activity,” Horvath says, actually remained fairly steady from 2006 to 2009, reaching a high of 44,593 jobs in 2008 before flattening out to 41,560 jobs in 2009. The pattern was similar for both interior and industrial design jobs.

Overall, Colorado suffered a net loss of about 105,700 jobs between 2007 and 2009, and construction workers and workers in related sectors accounted for about 56 percent of those losing their jobs with 36,700 jobs lost in construction and 22,200 jobs lost in related sectors. That’s a very hard hit.

So where do we go from here? Can a surge in construction business help save the day?

With a population of 5 million people and population growth forecast at 1.5 to 2 percent, Horvath says, the need is clear for a strong construction sector to support new homes and buildings as the economy begins to grow. Colorado, however, may finally be bringing the percentage of construction industry jobs (again it’s the location quotient) back into line with other states.

That location quotient stat, Horvath says, is down to 1.29 in 2009 from 1.44 in 2001, and may very well need to revert to 1.0 for a healthy balance in the state’s economic outlook.

Different economic forecasts for overall Colorado job expansion this year range from growth of zero to 2 percent or completely flat to 44,000 new hires.

In Horvath’s November forecast, he expected some 15,000 new employees to be added this year, based on real GDP growth of 2.4 percent. Both of those numbers, he now says, “are likely to be revised upward.”

And that’s good news for all of the unemployed waiting for the hiring to begin.

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    A buzzer that goes off regularly at around 10 p.m. and 4 a.m. at the NIST/NOAA visitor center in Boulder apparently is starting to drive at least one neighbor slightly crazy. 

    Posting to a neighborhood List Serve for the Martin Acres area in South Boulder, Kimman Harmon claims the buzzer goes off when the federal labs are testing a system to detect terrorists entering the property.


    The tests go off twice a day and Harmon complains that the 4 a.m. buzzer is the worst. It's "killing me," she says. A 4 a.m. wake-up call is not what she really needs.

    Pleading for some help on the ListServe, she urged other neighbors to call and complain to the NIST security officials.

     Another neighbor responded that "Unfortunately, local authorities have little of no power to control what a federal agency's installation does on its property."

Categories : Books, Current Affairs
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Maybe, in times of economic uncertainty, one needs only to
look back in history to come to grips with how innovation inevitably changes
the business landscape.

 The fact of the matter is that any business – newspapers
being one in their own headlines recently — unwilling to adopt quickly to
far-reaching technologies such as the Internet simply go out of business.

 I thought immediately of the U.S. automakers and their
stubborn reliance on selling gas-guzzling (but previously profitable) trucks
and cars while listening to a recent lecture by Boulder author William L.
Reich, who wrote “Colorado Industries of the Past,” published this year by
Johnson Books.

Here in Colorado, and in Boulder, Reich looks at some of the
major business empires of their times, some of which today we only see in
boarded up mines or building foundations — “remnants of that bygone era.”

Then, as today, it was all about supply and demand. The
Japanese carmakers figured it out with safe, fuel-efficient cars that didn’t
break down while GM brought us the Hummer.

In the 1800s, as early Colorado pioneers arrived, many
thought they could strike it rich in gold only to discover how impossibly hard
mining was. Businesses making the real money, of course, were those that
figured out what everyone really needed – transportation, food (grains,
vegetables and fruit), beef and other meats, ice to keep everything from
spoiling, and, of course, essentials like beer and cigars.

Other industries took off as the gold rush reality set in,
Reich writes. Brickyards for buildings and homes, millinery shops making hats
and dresses for the women, saddle and spur makers for cowboys and cowgirls, and
a large sugar beet industry. “By the mid-19th century,” Reich
writes, “sugar was no longer considered a luxury item enjoyed only by the

One of the best-known spur and bridle manufacturers,
Crockett Spur and Bit, operated here in Boulder, starting in 1943 when it moved
from Lenexa, Kansas. It employed up to 125 workers at 944 Pearl St. Business
slowly dried up as the passenger car replaced the horse and buggy.

The mining of precious metals, both silver and gold, did
become a major industry for Colorado, and Reich describes  how new inventions improved not only
the efficiency of the mines but also the life of the miners.

J. George Leyner, born in Left Hand Canyon west of Boulder,
eventually patented the air and water drill, helping to reduce rock dust in the
air and preventing many miners from a death of silicosis.

The mining industry was especially entrepreneurial, with
hundreds of patents for new pumps, mechanical tables and chemical processes to
extract gold and other metals from the ore piles. Reich weaves in interesting
old photos and illustrations of mills, furnaces and mining techniques in his
book’s chapter on “Mining Precious Metals.”

So what happened to many of the bedrock industries?
Innovation for the most part.

It’s hard for us to consider, as we grab some ice out of our
frig, how everyone depended on the icehouses. Early on, before electricity, ice
was harvested from frozen lakes and stored with sawdust or hay.

Adolph Coors, Reich writes, built his icehouse – 60 by 40
feet and 16 feet high – along with his brewery in Golden.

Boulder had its own beermaker, the Boulder Brewery,
eventually renamed the Crystal Springs Brewery. Now we support our own local
microbreweries such as Boulder Beer, Avery and Mountain Sun.

While lighting up a cigar easily gets you kicked out of a
bar today, almost every Colorado town had its own cigar rollers, who sold their
product through drugstores, billiard parlors and saloons, Reich writes.  “An average cigar maker rolled and
turned in about 200 to 250 cigars a day, so he would make between $15 to $20
per week, good wages for the times.” Today, a high-quality cigar might cost you
$10 to $15 just for a smoke.

Those old cigar boxes, now collectibles, indeed were small
works of art, with specialty brands such as the Denver & Rio Grande R.R. Scenic
Line Cigar or Colorado Maid Cigars, using Victorian women as the advertising

“Colorado Industries of the Past” is full of stories of
businesses that helped determine Colorado’s future. Only time will tell if our
governor’s new program to build jobs and companies to renewable and clean
energy will succeed.

What new breakthroughs in solar, for example, could doom the
forecasted landscape of huge wind turbines on the plains?

Boulder celebrates its 150th anniversary in 2009,
a good time to become reacquainted with our colorful history. Booms and busts,
you’ll find, are nothing new. For a new startup or car building legends like
Ford and GM, change is inevitable. It’s a lesson all businesspeople – and their
investors — eventually learn.

Categories : Books, Business
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