Eight mountain states see economic horizon above US as a whole
The eight states in the Rocky Mountain area have been trying to reach a peak of higher economic growth. The going looks pretty easy, with a few tough stretches here and there, according to the United Banks of Colorado Inc.
This year brought a moderate economic recovery for the eight states, and the slower growth will continue to be a problem in 1982. But the regional economy is expected to strengthen by the second half of next year.
Tucker Hart Adams, chief economist at UBC, predicts the region's total personal income will rise 12.8 percent in 1982, close to this year's nominal rate. He points out that slower inflation implies better real income performance.
Between 1970 and 1980, personal income in the mountain states expanded at a 12.9 percent annual rate, topping the 10.2 percent national figure. The difference stems primarily from an in-migration that has resulted in a population growth rate three times that of the nation as a whole.
Retail trade, which typically follows income growth, was another sign of expansion, climbing at an annual rate over the past decade of 13.1 percent, compared with 10.4 percent nationally.
Included in the mountain region are Arizona, Colorado, Idaho, Montana, Nevada , New Mexico, Utah, and Wyoming - a sparsely populated area with only 13 people per square mile, vs. 200 per square mile in the Northeastern states.
Colorado and Arizona account for roughly half the region's population, income , and other key economic measures.
''While the mountain region is a lively growth area, it also enjoys a stable economy,'' Mr. Adams says. Its unemployment rate, for example, was in line with the national rate until 1975. Since then, though, it has been below the national average.
During the 1970s, the mountain region had one of the two lowest business failure rates in the country every year except 1975, when the region's rate was third lowest.
The outlook is bright for the region's energy field, too. Though the mountain area contains only 8 percent of US oil and gas reserves, it holds more than 40 percent of the nation's coal and about 90 percent of both uranium and oil shale reserves.
''Although the prospects for each of these major types of energy are different, this region will clearly continue to attract development dollars and to produce a larger and larger share of the nation's energy,'' Adams says. In line with those prospects, the US Census Bureau forecasts that seven of the 10 fastest-growing states during the 1980s will be in the mountain region.
But the bank says a rough trail lies before the housing industry. The region's housing recovery will be dampened by a decline in residential construction in Arizona, where large inventories, slower growth, and affordability problems are negative factors. UBC also predicts that new contracts for nonresidential buildings will pick up at a slower rate as the office boom in Colorado slows.
Of the eight states, Colorado set one of the better paces in tackling unemployment this year. The jobless rate ranged between 5.2 and 6 percent, well below the 7.4 percent national average and the state's 1980 average of 5.6 percent.
''Employment growth, although sluggish by Colorado standards, was more than twice that experienced nationally, fueled by growth in mining, transportation, and services,'' the economist reports. Both construction and government employment were down this year, however.
UBC expects Colorado's population to top the 3 million mark in 1982. After a strong compound growth rate of 2.7 percent in the 1970s, the state's population expansion slowed sharply as unemployment rose with the 1980 recession. Population should average closer to 2 percent growth over the current decade, partly because of a larger base and a slight slowing in the energy boom.
Mining employment provides only 2.6 percent of Colorado's nonagricultural jobs, but it's been growing at a 12 percent annual rate over the past eight years - nearly three times the rate of overall job expansion.
The energy industry directly and indirectly leases half the office space in downtown Denver and accounted for 16 to 30 percent of the job growth during the 1970s, says Adams.
Denver serves as the regional administrative center for energy companies. There are more than 2,500 petroleum and mining companies in Colorado, the bulk of them small independents employing fewer than 50 workers.
Only 15 percent of Colorado's petroleum exploration and production employees work with Colorado operations. The rest handle activities outside the state, concentrated in the mountain region but ranging worldwide.