Report: Carson expansion kept local economy growing

February 23, 2011

Expansion at Fort Carson helped the Colorado Springs area’s economic output grow faster in 2009 than any other metropolitan area in Colorado, even as output declined nationwide and in five of the state’s six other metro areas, according to a report.

The area’s economic output in 2009 grew by 2.7 percent from 2008 to $25.3 billion, according to figures released Wednesday by the U.S. Bureau of Economic Analysis. The growth rate was the area’s slowest since 2002, but the Springs was one of 74 metropolitan areas where economic output grew. Economic output dropped by an average of 2.4 percent in the nation’s 366 metro areas during 2009 and fell in 80 percent of them as a result of declines in manufacturing, construction and business services.

Economic output is the value of goods and services generated in the local economy and is calculated by the bureau for all 50 states and 366 metro areas. The bureau calculates the output data, which it calls gross domestic product, primarily from income statistics compiled by the U.S. Bureau of Labor Statistics.

Without the arrival of 6,500 troops at Fort Carson from Fort Hood in Texas in 2009, the area’s output would have declined that year. Output from the private sector declined by nearly 1 percent in 2009, while output from the military and other government agencies jumped by 12.6 percent during the same period.

“If not for Fort Carson, Colorado Springs would be in the same shape economically as the rest of the metro areas in the state and most of the rest of the nation,” said Fred Crowley, senior economist for the Southern Colorado Economic Forum. “I wouldn’t expect that to continue when the 2010 numbers are released (scheduled for Sept. 13). Any expansion of Fort Carson is unlikely until at least next year and cuts are possible after that as a result of declining military and federal spending.”

The increased output shows the area’s economy headed in the opposite direction of employment and unemployment data, which reflect declining payrolls and near record numbers of residents out of work but don’t include military personnel. Other local economic indicators, including city sales tax collections and new vehicle sales, started improving in late 2009 and continued growing last year, while housing construction and sales started growing in mid-2009 but weakened in the last half of 2010.

When adjusted for inflation, the area’s economic output in 2009 grew 1.1 percent from 2008, the fastest among the state’s metro areas. Denver was the only other metro area in the state where output grew during the same period, while output in Grand Junction dropped 7 percent. When the inflation-adjusted output for 2009 is calculated on a per-person basis, it declined from 2008 in all of Colorado’s seven metro areas, but the 0.4 percent drop in the Springs area was the smallest.

Call the writer at 636-0234.

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