County indicators strong, but worker shortage still a worry

Boulder County’s leading economic indicator index continued to post strong gains in the third quarter of 1997, the most recent period for which figures are available, although some signs point to an “economic reality check” in the first quarter of 1998.

The “reality check” may be driven by the county’s phenomenonally low unemployment rate of 2.9 percent in the third quarter, said Sandra Julsen, a Boulder Chamber of Commerce employee who helps produce the index, a joint project of the chamber and the University of Colorado business research division.

“The caution about the economy is because of the low unemployment rate, which is turning into work force shortages. In Boulder County, the work force is so low, salaries are going up,” Julsen said. “That is a Boulder County issue and a national issue as well.”

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Not only is the shortage putting pressure on wages, which pushes up inflation, it also is causing some area businesses to consider moving, according to the leading economic indicator index. Employers are looking to larger population centers in Colorado, like Denver, and outside the state.

Mirroring the shortage were the number of help wanted ads placed in the third quarter, which rose 13 percent compared to the same quarter last year. Even though county employment and unemployment are at record levels, the number of help wanted ads show there is room to grow, according to the index.

Overall, the index rose 4.3 percent during the third quarter of 1997. It includes residential and commercial building information, labor information, retail sales information and a stock index made up of publicly traded Boulder companies.

Retail sales of $1.44 billion in the third quarter were up 7 percent over the previous quarter and 11 percent over the same period of 1996. Retail sales growth in the county continues to beat the state average, with consumers spending 9 percent more in the first nine months of 1997 than they did in the first nine months of 1996.

Residential building permits, a more seasonal variable, dropped 17 percent for the quarter. However, 1997 building permits are up more than 60 percent for the first nine months over the first three quarters of 1996. The huge jump was attributed mainly to a change in record keeping for the second quarter.

Non-residential building permits also decreased — 10 percent for the quarter from the busy summer building months. Building permits year-to-date rose a moderate 6 percent over the same time period in 1996.

The stock index, made up of publicly traded Boulder companies, rose 8.5 percent over the previous quarter. And compared to the year before, the stock index was up 10 percent. It did not, however, reflect more recent fluctuations in the stock market, Julsen said.