Cost of living in region remains below average

The cost of living in the Fort Collins-Loveland area has dropped again, keeping it below the cost of living in the Greeley area, according to the most recent figures from the American Chamber of Commerce Researchers Association.

The ACCRA Index for the first quarter of this year, released in May, revealed a composite index of 98.1 for Greeley, or 1.9 below the national average, while the Fort Collins-Loveland area came in at 95.4, or 4.6 below the national average.

Greeley’s composite index has trended up since the beginning of 2007, after falling every quarter of 2006. During the same time period, the Fort Collins-Loveland area, based on data compiled by the Loveland Chamber of Commerce, has gone up and down from one quarter to the next after seeing the most significant drop between the fourth quarter of 2006 to the first quarter of 2007 – from 103.3 to 94.1.

The 2007 annual average report, released in February, put Greeley at a composite index of 98.3, 1.7 below the national average and 4.4 above Fort Collins-Loveland’s composite at 93.9.

While the region’s composites fall below the national average, they are well above that for the state’s cheapest city. Pueblo comes in at 86.7, while Glenwood Springs, the most expensive city in the state, comes in at a composite index of 130.2.

Pueblo falls below the national average in every category except grocery items, while Glenwood Springs is above the national average in every category except utilities. Gunnison comes in second for most expensive city at 115.6, with Denver in third place at 105.1.

Only one measure

Businesses consider cost of living when deciding where to relocate or expand. If the cost of living is higher in a particular area, then the company must consider increasing employee compensation to make up the difference.

Larry Burkhardt, president and CEO of Upstate Colorado Economic Development, said that the ACCRA index is “only one measure among many that shows how our community might be competitive.”

In fact, cost of living is “relatively unimportant” to companies considering a move to Northern Colorado, Burkhardt said. “A company’s biggest concern is access to quality labor, transportation systems, education – both K-12 and higher – and the business regulatory climate.”

Although Greeley may have a higher composite index than the Fort Collins-Loveland area, it is still below the national average and, according to Burkhardt, that is what matters when a business is deciding where to relocate.

California poultry operator Foster Farms recently spent several months evaluating Colorado’s market and the Greeley area in particular. The company announced on July 1 that it would not be following through with a planned expansion due to a volatile commodities market and a “higher-than-anticipated cost structure in Colorado.”

Burkhardt also questioned the accuracy of the ACCRA numbers, citing past reports of higher-than-actual housing costs in Greeley. ACCRA acknowledges that indexes are not necessarily comparable from quarter to quarter because variables, such as the number of cities reporting data or the type of data being reported, can change.

Burkhardt’s counterpart in Larimer County said the cost-of-living index is used primarily for business attraction. Maury Dobbie, president and CEO of Northern Colorado Economic Development Corp., said her organization provides companies with a comparison of the Fort Collins-Loveland statistics with data from competing cities.

“When a prospect provides a specific list of cities that we’re being compared to, then we provide them with a direct comparison of statistics and data, so that at least we let them see the numbers for themselves,” she said.

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