Services stacks up as city’s biggest industry employer

FORT COLLINS – Our focus this month is on the City of Fort Collins as defined by ZIP codes 80521 through 80526. Total economic activity in this area is about $5 billion.About $3 billion of that is new value added by local labor, land, capital and entrepreneurial activity. There are almost 75,000 jobs in these ZIP codes and almost $2 billion of wage and salary income.
Services is the biggest industry sector in the Fort Collins economy, with 27 percent of total employment, 20 percent of employee income and 18 percent of value added. This does not include financial services or government services. Manufacturing has 14 percent of employment, 29 percent of employee income and 28 percent of value added.
Wholesale and retail trade are also important in the local economy, with 25 percent of employment, 14 percent of employee income and 13 percent of value added.
Government, which includes Colorado State University, Front Range Community College and the Poudre R-1 School District, generates 18 percent of employment, 23 percent of employee income and 14 percent of value added.
Data from the U.S. Department of Commerce shows that services employment as a percentage of total employment in Larimer County has grown rapidly since 1981, while manufacturing employment has slowly declined since 1979. Retail-trade employment has been fairly constant, in spite of the increasing size of this sector. Government employment has declined, as a percentage of total, since about 1971.
Personal income earned in the retail-trade sector, as a percentage of Larimer County total personal income, has declined since at least 1969, as has personal income from government. Personal income from services has steadily increased, while manufacturing income increased rapidly between 1971 and 1979 but has been relatively constant since then.
The computer industry in the Fort Collins economy is about a $500 million industry, measured in terms of total industry output. Malt beverages is about $350 million, real estate is about $325 million, and the internal-combustion engine industry is about $275 million.
An even closer look at the local economy shows that the education portion of state and local government employs almost 6,000 workers locally. The eating and drinking sector is close behind with 5,500 employees. Noneducational state and local government follows with 4,500, miscellaneous retail with 3,500, real estate with 3,000, electronic computers (Hewlett-Packard Co. and others) with 2,900 and doctors and dentists with 2,000.
Internal-combustion engines (Woodward Governor Co.) employs 1,400, and malt beverages (Anheuser Bush Cos. Inc.) employs more than 800.
What’s the impact of CSU students? Colorado State University researchers estimate that $156 million of direct expenditures are made in the local economy each year by CSU students. This translates into 4,900 local jobs, 6.5 percent of total employment in the Fort Collins economy.
Electronic computers add the most value to the Fort Collins economy ($300 million), followed by real estate ($200 million), malt beverages ($160 million), education-related state and local government ($140 million) and noneducation-related state and local government ($130 million). The doctors and dentists, internal-combustion engines, and eating and drinking sectors are not far behind.
The most employee income in the Fort Collins economy is generated by the electronic computer sector ($200 million), followed by education-related state and local government ($140 million), and noneducation-related state and local government ($130 million). The fourth-largest sector is about one-half as large, doctors and dentists, with $60 million of employee income.
The Fort Collins economy exports more than $2 billion of goods and services, about $1 billion more than it imports. The largest export sectors are malt beverages ($340 million), electronic computers ($300 million), internal-combustion engines ($200 million), and real estate services ($180 million).
The largest importing sectors are malt beverages ($150 million), internal-combustion engines ($100 million), and electronic computers ($100 million).
The eating and drinking sector exports $70 million of output to nonresidents who come into Fort Collins to drink or enjoy a restaurant meal. However, the sector also imports $10 million of prepared meals and bar tabs that residents consume elsewhere.
Employment multipliers of 3.0 or more are high. No large sector in the Fort Collins economy had an employment multiplier that high. The malt-beverages sector employment multiplier is 2.56. Employment multipliers for other large employers in the Fort Collins economy are 2.32 for internal-combustion engines, 2.29 for real estate, 2.08 for electronic computers, and 1.50 for state- and local-government sectors.
An employment multiplier of 2.56 means that 1.56 jobs are created elsewhere in the economy for every job in the malt-beverage sector.The value-added multiplier for the eating and drinking sector is 2.17. All other large-sector value-added multipliers were less than 1.70. Low value-added multipliers suggest that required inputs are not produced locally; thus, they don’t stimulate other value-added production locally.John Green is a consultant and professor of economics at the University of Northern Colorado in Greeley. Eric Siverts is president of Siverts & Associates in Fort Collins.
ÿ