An Economic Boom Draws Recession-Weary Throngs To Rocky Mountain States
COLORADO SPRINGS, COLO.
HERE at the foot of Pikes Peak, where the vistas are long and the jobless lines short, so many houses are being built that contractors are trying to steal each other's work crews. And real estate agents are asking people - almost begging them - to sell their homes.
"There isn't a week that goes by that I don't get a cold call from an agent wondering if I have any intention of selling," says Tucker Hart Adams, Colorado National Bank chief economist. He works in Denver but lives in Colorado Springs.
This community along Colorado's Front Range is on the robust end of a boom across much of the Rocky Mountain West. When the great 1990s recession rolled across America, it forgot to stop in the mountain states.
People and companies are migrating to the area by the vanful. Colorado Springs, Salt Lake City, and Boise, Idaho, are becoming to the '90s what California was in earlier decades - meccas for people seeking fresh starts. The mountain is replacing the palm as the new symbol of Shangri-La.
Though omens exist on the horizon, consider that:
* Colorado's jobless rate is around 5.6 percent, about 1.5 points below the national average. Nonfarm job growth is nearly double the national rate. Some 60,500 more people moved into the state last year than left - the most since 1978.
* Utah's jobless rate is about 4 percent. Along the Wasatch Front, between Salt Lake City and Provo, a high-tech hub is springing up to rival the entrepreneurial bookends of Massachusetts's Route 128 and California's Silicon Valley.
* Spurred by a computer boom, Idaho is seeing manufacturing grow faster than in almost every state. It has led the nation in nonfarm job growth the past two years. Enough people have moved to the area since 1990 that 1 in 15 residents is a newcomer.
Even Wyoming and Montana, moribund a few years ago, show at least a modicum of economic zip. "The West is on a roll," says Philip Burgess, president of the Center for the New West, a Denver think tank. "The last recovery was late in coming to the Rockies, and the region has held up well through the current recession."
One reason the region looks so strong now is the template against which it is being compared. In the 1980s energy collapse, the resource-dependent West recoiled. Colorado's jobless rate approached 8 percent in 1987. Speculative overbuilding aggravated conditions: At one point, more than a third of Denver's offices were vacant.
The current boom, though not uniform across the region or as intense as one in the '70s, reflects forces both general and local. As other regions have become costly and congested, people and companies have looked for new places in which to settle. The mountain West, with a strong work ethic, affordable living, and comparatively few regulations, has been a beneficiary.
"California's demise has been our gain," says Paul Zelus, director of Idaho State University's business-research center.
Denver is being helped by a mile-high list of public-infrastructure projects. Some 8,000 workers are scrambling to finish the airport by December. The controversial facility will be the nation's largest. Other developments under way: a new stadium for the Colorado Rockies, a library, and a $105 million light-rail system.
"There is a lot of infrastructure construction going on that is boosting the economy," says Nancy McCallin, the state legislature's chief economist. "But there is going to be a letdown when it is all over."
More than 1,500 high-tech firms have taken root in Utah - about one-third of them software firms, led by WordPerfect and Novell. One draw: a cheap, well-educated, and young work force.
What is notable about Idaho's growth, Mr. Zelus says, is that it is fueled by goods-producing industries - microelectronics, farm implements, and other manufacturing, rather than service industries, the flywheels of the post-industrial economy. Once the service sector takes off, there should be more growth.
Yet, growth has a price. Idaho newcomers are changing the West's isolate parochial character. In southern Idaho, Hispanics have made bilingualism a hot school issue.
Newcomers to Salt Lake City's "software valley" have infused the area with a hot-tub hip flavor. Mormons, who make up 70 percent of the state population, comprise only 50 percent of the city's residents.
"All of this is changing the character of Salt Lake," says Douglas Jex, a state economic-development specialist.
In Colorado Springs, housing prices are rising at near double-digit rates. Subdivisions gallop north toward Denver.
The economic ride won't last forever. In Colorado, there is anxiety over what will happen when Denver's public construction jobs wind down. Defense layoffs have taken a toll - notably the shrinking work force of the Martin Marietta Corporation. The technical training center at Lowry Air Force Base will close mid-decade, and the Rocky Flats nuclear-weapons plant is cutting its work force.
"I think late 1994 and 1995 are going to be difficult years for the Colorado economy," Ms. McCallin says.
Colorado, like Utah and Idaho, has diversified its economic base. Thus, even if there is a slowdown, it shouldn't be as severe as in the 1980s, Mr. Adams says.
This community of 400,000 is a growing hub for high-tech, publishing, nonprofit groups, and the "religious right." Even so, 1 in 2 jobs is still defense-dependent. "We may need all this growth to offset losses that lie ahead," says Robert Scott, president of the Greater Colorado Springs Economic Development Corporation.