A hot housing market and a resurgence in manufacturing boosted economic output in the Colorado Springs area by the biggest percentage since 2010, the U.S. Bureau of Economic Analysis said Tuesday.
The 2017 growth rate was slightly behind Denver and somewhat ahead of Boulder but well behind the surging growth of Greeley and Fort Collins, which ranked sixth and 13th, respectively, among the nation’s 383 metropolitan areas. Denver ranked 47th, and Colorado Springs ranked 58th behind top-ranked and oil-rich Odessa, Texas, which grew 12.1 percent from 2016.
Colorado Springs area’s output, which the federal agency calls gross domestic product, rose 5 percent from 2016 to $32.7 billion, up from a 3.5 percent growth rate in 2016 and the biggest annual gain since a major troop buildup at Fort Carson helped to push growth to 5.5 percent in 2010. The 3.5 percent rate for 2016 first was reported at 5.4 percent but was revised downward as more information became available.
“Growth has really taken off in Colorado Springs in the last few years. A lot of what we were seeing earlier across the state is now happening in Colorado Springs, including lower unemployment, faster job growth and people returning to the job market. We have come a very long way in a short period,” said Tatiana Bailey, director of the Economic Forum at the University of Colorado at Colorado Springs.
When the output numbers are adjusted for inflation and population growth, the 1.5 percent gain matched the 1.5 percent gain in 2009 as the biggest since before the most recent recession. The area’s real output per person — the most accurate picture of economic growth — was the highest since 2013 at $39,905 but remains 5.8 percent below the peak level reached in 2005.
More than a third of the area’s economic growth came from the finance and real estate sector, which grew 6.7 percent to $5.02 billion, and from durable goods manufacturing, which surged 21.4 percent to $1.56 billion. Other major contributors included professional and business services, construction and health care. The information sector was the only major part of the economy to decline — by 10.5 percent.
Detailed data on the manufacturing sector wasn’t available from the agency. But Tom Binnings, a senior partner in Summit Economics, a local research and consulting firm, speculated that the big manufacturing gain might have been fueled in part by the expansion of Sierra Nevada Corp. at the Colorado Springs Airport, where the company uses two hangars — a third is under construction — to modify structural, avionics, sensors and other components on aircraft under several Department of Defense contracts to support the global war on terror.
“The best news here is that the local economy is diversifying away from (relying on) the military,” Binning said. “There has been real (inflation-adjusted) growth in excess of 1 percent every year for the past 15 years, even with a big decline in manufacturing, which has been more than offset by gains in services.”
Economic growth in the nation’s metro areas increased 2.1 percent last year, up from 1.6 percent in 2016. Economic output is the value of goods and services generated in a local economy and is calculated by the Bureau of Economic Analysis for all 50 states and 383 metro areas. The bureau calculates the output data by adding output from all industries in a metro area.