Economic Forecast 98: Few complaints

It should come as no surprise that if the national economy continues to be strong, Boulder County’s economy also will continue to perform well.

Sun Microsystems’ plans at Interlocken business park continue to be mentioned by business leaders in all sectors of the economy. If all goes as planned, the customer service computer facility may employ 4,000 people.

The outlook for the manufacturing and the service industries continues to be strong in 1998, says John Hunt, president of the Economic Development Association of Longmont. And companies like Amgen Corp. and Adaptec Inc. (both in Longmont) and Sun Microsystems in Broomfield continue to draw the interest of other medical technology and high technology companies looking to move to Boulder County, he says.

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Some existing companies already working in those fields here are also expected to expand rapidly, Hunt says. He declined to name any of the companies.

At the same time, many companies that have grown in Boulder County are moving to Weld County and other cheaper business real estate areas, a trend Hunt expects to continue.

“We have the problems of companies consolidating today and moving out,” Hunt says. “A lot of companies leave Boulder and just go out (to Weld County) directly.”

Here, sector by sector, are some thoughts on what to expect in other areas of the economy in 1998:

Manufacturing

A labor shortage, made tighter by a healthy economy, is expected to continue in 1998. Blackfox Training Institute in Longmont is one business working to train workers, at least in the electronics manufacturing area. Workforce Boulder County also is busy training workers.

The Front Range is the third most productive electronic assembly area in the United States after the Silicon Valley in northern California and Dallas, says Neal Buckner, vice president and an owner/member of Blackfox Training Institute.

So electronics training programs like those at found Blackfox just begin to scratch the surface, Buckner says. The Longmont-based company has trained workers at places like Codar Technology and Electronic Manufacturing Systems in Longmont, Lucent Technologies in Northglenn and Hewlett Packard in Loveland.

To prepare for the onslaught of people who need to be trained in new assembly technology in 1998, Blackfox has doubled its training force, taking on several contract teachers. Workers must complete a 160-hour program to get certified in electronics assembly, Buckner says.

Finance

Bank growth is being fueled by new residents continuing to move to the eastern end of the county, new businesses and a healthy economy, banking industry officials say.

Vectra Bank, recently acquired by Zions Bank of Utah, will continue to expand in 1998, says Patrick McDuff, northern region president of Vectra Bank. Vectra recently opened a new branch in Commerce City and plans branches for Longmont and Highlands Ranch. Business customers can expect more cash management services, and individuals can expect more personal services with the new owner, McDuff says.

“Certainly the Front Range is healthy; it’s one of the best states,” McDuff says. “Frankly,

times are good, and our clients are doing well, and prospective clients are doing well, so we think it will be a good year. That will trickle over into 1999 as well.”

New bank branches are opening left and right in Louisville. Lafayette State Bank is opening a small-scale branch downtown at the former Steinbaugh Hardware location; Bank of Boulder will open a branch at McCaslin Boulevard and Centennial Parkway, says Bill Reef, a consultant to the bank and former marketing director. In the future, Bank of Boulder has its eye on Longmont, Reef says.

The venture capitalists who have flocked to Boulder County to work with entrepreneurial start-ups and other businesses also predict a busy new year. The still-fledgling Internet “industry,” natural foods and telecommunications will all be big in 1998, according to two area venture capitalists. Telecommunications and technology sectors are still growing, says Greg Becker, senior vice president and manager of the Boulder office of Silicon Valley Bank. The commercial bank with assets of $2.5 billion works with venture capitalist firms to leverage equity investments.

“Given the amount of venture capital in the market, both from local venture capitalists and firms outside the state, it appears 1998 will continue to be strong year in technology companies,” Berger says. “I anticipate across the board, the telecommunications companies, the cable companies, U S West and so forth will do well. Centennial Funds, a local venture capital firm in Denver, has a substantial amount to invest, and given their interest in telecommunications, I would think they’ll be hoping to grow telecommunications in Colorado.”

New federal standards for organic foods is making the natural foods industry explode, says Kyle Lefkoff, a partner at Boulder Ventures. Horizon Organic Dairy, in which he has invested, has done really well, Lefkoff says.

Hotel, tourism, conventions

Hotel competition from the eastern part of the county continues to grow, although it doesn’t seem to be hurting Boulder’s reputation as the county’s hotel/motel giant, says Brian Nilsson, executive director of the Boulder Hotel and Motel Association.

The additional 760 rooms opened in Louisville in 1997 aren’t necessarily related to drops of 2 to 3 percent some months at Boulder hoteliers, Nilsson says. A new Marriott Hotel opening in Boulder meant more hotel rooms available to occupy, and visitors met the challenge, he says.

“If you look at the occupancy numbers, we’re actually filling 5,000 more rooms per month more than we did in 1997,” Nilsson says. “My best guess is that it’s not going to be much different in 1998. I’m not projecting anything different for next year in terms of occupancy.”

Additional hotels scheduled for 1998 include a Country Inn and Westin Hotel in Westminster and an Omni Hotel in Interlocken business park. Developers also are discussing plans for two more hotels at the 96th Street interchange just west of Interlocken.

Transportation, Communication, Utilities

It’s no secret that telecommunication companies continue to grow in Boulder County and across Colorado. And companies like Boulder-based Colorado Pacific Technologies, a private phone system vendor, expects to do well in 1998, based on the continued bright market created by the federal Telecommunications Act of 1996. CPT expects to grow in markets where it has already established a strong clientele; hotels/motels, apartment complexes and jails.

“You don’t have to be AT&T to offer state-of-the-art phone services,” says Tim Patterson, a principal at the new phone company. “You just have to be smart and have to work hard.”

While Patterson says there is a lot of competition in the local market created by unbundling of typical phone services, the “big picture” still is being controlled by large phone companies. In 1998, he said he expects that to change a bit in the small companies’ favor.

“Everyone is hoping that the competition set by the Telecom Act of 1996 will take place, but it looks like it won’t happen immediately,” Patterson says

As operator service providers, CPT provides local and long-distance service, voice messaging and voice mail services.

Retail, wholesale, trade

Retail competition continues to heat up in Boulder County with places like Eagle Hardware in Louisville, Target in Broomfield and Dillard’s at Twin Peaks Mall in Longmont apparently drawing some shoppers away from Boulder, the county’s traditional strong shopping hub.

Downtown Boulder, on the Pearl Street Mall, shopkeepers tell her, “It’s not like the old days; it’s just not as great as it used to be,” says Marilyn Haas, executive director of Downtown Boulder Inc.

But the retailers aren’t complaining since there still seems to be enough foot traffic to go around, Haas says.

Construction

As long as companies continue to be attracted to Colorado, the construction business will remain strong, says, Andy Fiamengo, division business development manager for Taylor Ball Construction.

“Every year we think it’s going to start to slow down, and we don’t see that happening,” Fiamengo says. “Colorado continues to feel the growth surge.”

Taylor Ball does not release figures on work completed or plans for the future because of the competitive nature of the business, Fiamengo says.

Services

In the health-care industry, health-care costs will continue to be a focus, says Lois Conyers, chief financial officer and senior vice president of Centura Health, parent organization for Avista Adventist Hospital in Louisville.

Other service industry areas include the legal sector, the temporary work sector and many high-technology jobs, including computer consultants.

Because the unemployment rate is so low, those in the health-care industry continue to have a hard time recruiting people at existing wages, from housekeepers on up, Conyers says. And those troubles affect health care costs.

“Employers are starting to look at quality measures,” Conyers says. “Measures to keep down premium costs affected the whole industry.”