Rising utilities and gasoline costs pushed Colorado Springs’ cost of living last year to its highest level since 2001, according to a nationwide survey.
Local costs were 98.8 percent of the national average in 2018, up from 95.7 percent during 2017, according to the Council for Community and Economic Research in Arlington, Va. Last year’s index was the highest annual number, which is an average of separate quarterly calculations, since local costs were 99.5 percent of the national average in 2001 (there is no average for 2003 because no index was produced for the first two quarters of that year).
“The cost of living here does reflect a robust local economy, which is growing at a faster rate than the U.S. economy, so you would expect costs to increase faster locally,” said Tom Binnings, senior economist for Summit Economics, a Colorado Springs research and consulting firm.
The primary drivers of the jump, the biggest since 2011, were the utilities and transportation components of the index. While the utilities component remained well below the national average, it still surged from 75.9 percent of the national average in 2017 to 89.8 percent in 2018, mostly because electricity costs went up six times faster than the national average.
The transportation component of the index also increased dramatically, from 96.7 percent in 2017 to 105.2 percent in 2018. That’s a product of local gasoline prices rising 22.7 percent last year while the national average went up 15.8 percent.
Among the other components, miscellaneous expenses rose from 95.1 percent of the national average in 2017 to 99.2 percent in 2018. Components measuring groceries, housing and health care costs declined from 2017.
The cost of living in the Springs rises most quickly during periods of strong economic growth — the index was above the national average throughout the late 1990s — and falls during recessions, hitting an 18-year low of 92.3 percent of the national average in 2009.
Despite the increase, the Springs still compares favorably to other major cities, including Denver, where costs increased from 112 percent of the national average in 2017 to 113.2 percent last year. The big difference between the cost of living in the Springs and Denver was housing costs — just below the national average in the Springs and 138.8 percent of the average in Denver. Major cities such as Boston, Seattle, Washington, D.C., San Francisco and New York were at least 150 percent of the national average.
“While the cost of living average has increased in Colorado Springs, our city is still considered affordable compared to other midsize metro areas,” said Tammy Fields, chief economic development officer for the Colorado Springs Chamber & EDC.
“The cost of living in Colorado Springs is nearly 2 percentage points below the national average and 14.4 percent lower than Denver. It’s well below cities on the coasts, which are 50-plus percentage points higher than the national average.”
The council’s cost of living index doesn’t measure inflation. It compares prices in 270 metropolitan areas for 57 goods and services used or purchased by households where middle managers live. It’s designed to help managers compare living costs when moving to another city.
Until recently, Pueblo ranked among the nation’s lowest-cost metro areas, a list now headed by Harlington, Texas. Pueblo’s cost of living last year was 93 percent of the national average, up from 90.6 percent in 2017. Grand Junction was the only other Colorado metro area measured, where costs fell to 93.4 percent of the national average in 2018 from 94.1 percent in 2017.