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Monday Report

From Bonneville Research June 15, 2009
Greetings!
 
The Colorado College State of the Rockies Report 2009
 
Will our children thank us?
 
For the past six years, the Colorado College State of the Rockies Project has identified, analyzed and reported on issues unique and critical to the eight-state Rockies region. When the Project was launched in 2004, one impetus was a quote from Stanford's Bill Lane Center for the Study of the North American West: "The West, through Hollywood, has an enormous influence on popular culture, but otherwise it generally lacks an intellectual, cultural, or social presence within either the country or the continent."
 
Since 2004, the Rockies region has experienced tremendous population and economic growth. The "Rockies Baseline," reported every year in the State of the Rockies Report Card, shows that the Rockies' growth in median income and home value outpaces the nation, and job growth in the Rockies is double the national average since 2000. This regional growth demands national attention.
 
But demanding attention and asserting an "intellectual, cultural, or social presence" are two very different stages of growth. The Rockies has outgrown its stigma as a region unable to sustain itself, allowing the federal government to control vast tracts of land and resources with little oversight or thought to the future - often referred to as the "inland colony" of the United States.
 
What has changed since 2004?
 
Looking at the region as a whole, our population is young and continues to grow faster than the national average. More of our students graduate from high school, and we have just as many students completing college, graduate, and professional degrees as the rest of the country. Our median home value is higher than the nation's, and our median rent is lower. Though still lower than the national average, our household, family, and per capita incomes are growing at a faster rate. Every category of employment except one has grown faster in the Rockies since 2000.
 
Most of the statistics reported in this year's baseline are encouraging, but a few present opportunities for improvement. Though a higher percentage of women graduate from high school in the Rockies, the gap between men and women in higher education is wider than the rest of the nation. Also, as incomes for every group in Montana and Wyoming boom, Utah has shown no change in household income since 2000 and Colorado's household income has decreased during the same interval.
_____________________________________________________________________

On the Bonneville Research Web Site
 
 
 
The Colorado College State of the Rockies Report 2009 
Thanks,
 
Bob & Jon
SCORECARD: 
 
 

Population Growth, 2000 - 2007

% Change

United States

7%

Rockies

18%

Nevada

28%

Arizona

24%

Utah

18%

Colorado

16%

Idaho

13%

New Mexico

8%

Montana

6%

Wyoming

6%

 

 

People in Poverty

2000

2007

United States

12%

13%

Rockies

12%

12%

New Mexico

18%

18%

Arizona

14%

14%

Montana

14%

14%

Colorado

9%

12%

Idaho

11%

12%

Nevada

10%

10%

Utah

9%

10%

Wyoming

11%

9%

 

 

Percentage of population 25 and older who at least Earned a Bachelor's Degree

 2007

United States

27%

Rockies

27%

Colorado

35%

Utah

29%

Montana

27%

Arizona

25%

New Mexico

25%

Idaho

24%

Wyoming

23%

Nevada

22%

 

 

Percentage of population 25 and older who Earned a Graduate or Professional Degree

 2007

United States

10%

Rockies

10%

Colorado

12%

New Mexico

10%

Arizona

9%

Montana

9%

Utah

9%

Idaho

8%

Wyoming

8%

Nevada

7%

 

 

Change in Median Family Income

2000 - 2007

 

Adjusted for Inflation

 

United States

2%

Rockies

7%

Wyoming

13%

Montana

8%

Arizona

6%

Nevada

6%

Idaho

3%

New Mexico

3%

Colorado

1%

Utah

1%

 

Source: The Colorado College State of the Rockies Report 2009

 

http://www.coloradocollege.edu/stateoftherockies/reportcard.html


Economic Notes: 
 
Global Business Confidence -16.4
Global business confidence in early June improved to its best reading since last October. Sentiment remains consistent with global recession, but the recession is quickly moderating. U.S. and Canadian confidence has notably improved in recent weeks, with businesses saying that sales conditions are stabilizing. Expectations regarding the outlook for year's end are also much improved. Businesses continue to cut jobs and inventories, however, and pricing remains very weak.
 
Import and Export Prices +1.3%
Lifted by energy prices, import prices increased 1.3% in May, following April's revised 1.1% (previously 1.6%). May's gain was on par with expectations but leaves import prices down over 17% on a year-ago basis. Import prices excluding fuels rose a more modest 0.2% over the month. Some import price inflation is welcome, as the Federal Reserve is attempting to steer the economy away from a deflationary trap.

Bankruptcy Filings + 33.4%
Both business and personal bankruptcy filings grew rapidly in the first quarter. The number of personal filing remains low, however, still hindered by reforms enacted in late 2005. Filings were 33% above last year but remained 20% below the first quarter of 2005, before reform legislation and in a better credit environment. Business bankruptcies are high by any measure, with filings up 64% from last year to the highest level since 1993.
 
Consumer Credit (G19) -$15.7 bil
Consumer credit declined more sharply than expected, reflecting the ongoing effect of tight lending standards and weak consumer demand. Total credit balances fell by $15.7 billion in April to a total of $2.524 trillion. Revolving credit led the recent decline, although nonrevolving credit balances also fell substantially.

Employment Situation -345,000
Employment losses were far lower than expected in May. Payroll employment declined by 345,000, well below the 525,000 that Moody's Economy.com had expected. Fewer losses in construction, business services and retail trade and gains in leisure/hospitality drove this welcome moderation. The May losses were the smallest since September. Moreover, employment figures for both March and April were revised, showing a total of 82,000 fewer losses for the two months. However, the unemployment rate pressed higher, to 9.4%, an increase of 0.5 of a percentage point.
 
Job Openings and Labor Turnover Survey -36.2%
The April JOLTS report is consistent with April payroll data. Neither hiring nor separations changed much from March, but hiring fell far short of separations and the number of available jobs declined. Hiring improved slightly in April compared with March, thanks to stronger hiring in federal government. A total of 4.165 million people took new jobs. Private sector hiring was flat at 3.8 million. The number of job openings declined, to 2.5 million, from 2.6 million in April. The number of separations was unchanged; about 4.7 million workers left their jobs during the month.

Manpower Employment Outlook Survey + 2%
Employment expectations appear to be stabilizing in the United States. Employers reported an unchanged likelihood of holding onto workers in the third quarter of 2009, although hiring conditions will be weak. In Europe, labor conditions are expected to deteriorate in the third quarter, especially in the German manufacturing sector, but at a slower pace than previous quarters. Although Asia has the most optimistic employers on net, India and China report the weakest hiring expectations since the survey started in those countries.

Chain Store Sales Snapshot +0.2%
Chain store sales rose 0.2% in the week ending June 6, as the ICSC sales index showed little trend in recent weeks. Sales were 0.8% above their year-ago level, the worst performance in five weeks. The ICSC blamed cooler than normal weather, rising gasoline prices, and difficult comparisons to a period when rebate checks were lifting sales last year for the poor performance.

Wholesale Trade (MWTR)  -1.4%
Wholesale inventories declined by 1.4% in April, surpassing the consensus expectation of a 1.1% decline, following a downwardly revised 1.8% decline in March. Sales fell by just 0.4% in April after falling by an unrevised 2.4% in March. The inventory-to-sales ratio declined by one-hundredth of a point from 1.32 to 1.31 in April.

Jobless Claims -24,000
Initial claims declined by 24,000 to 601,000 for the week ending June 6, more evidence that layoffs are easing. Labor market troubles are still mounting, though; continuing claims increased by 59,000 to 6.816 million for the week ending May 30.

Business Inventories (MTIS): -1.1%
Total business inventories decreased 1.1% in April as businesses liquidate inventories. Retail inventories, the only new data in this report, fell 1%. The I/S ratio declined to 1.43, a sign that businesses may be starting to have some success in bringing down stocks relative to demand.

Retail Sales (MARTS) +0.5%
Retail sales improved in May, rising 0.5% in total and excluding autos. Further, April results were revised higher. Total sales fell 0.2% (originally down 0.4%) and sales excluding autos fell 0.2% (originally down 0.5%). Results were mixed across segments, with gas stations and building supply stores leading the gains and department and sporting goods stores leading the declines. Core sales rose a slight 0.1% after two months of declines.

Weekly Natural Gas Storage Report +106.00 bcf
Working gas in underground storage rose by 106 billion cubic feet during the week ending June 5. The consensus estimate was for an increase of 110 bcf.
Source: Economy.com
Investors buying up new state-issued bonds
 
State finance officials are uttering a new acronym in this year of TARP (Troubled Asset Relief Program) and ARRA (American Recovery and Reinvestment Act). It's BAB, short for Build America Bonds, or taxable municipal debt issued by state and local governments that is partially subsidized by the federal government.
 
The two-month-old program, part of the $787 billion federal economic stimulus plan, is catching on among financially distressed state and local governments looking for cash through the credit market. Borrowing costs are lower because Uncle Sam refunds 35 percent of the interest charges.
 
The bond money finances work on public buildings, ranging from schools to hospitals to water treatment plants to government housing to roads and bridges.
 
Source: Stateline.org
BONNEVILLE RESEARCH
 
Bonneville Research is a regional consulting firm focused on consulting services to state and local governments including economic analysis for real estate development, public-policy analysis, tourism and economic development. Since its founding in 1976, Bonneville Research has completed assignments throughout the intermountain west yielding unmatched experience in high quality public policy analysis and economic analysis.

In broad terms, Bonneville Research assists state and local governments find workable solutions and to establish quality and sustainable public policy.  We often work with private developers and public agencies in assessing the future economics and outcomes of real estate projects, economic development plans and opportunities for public/private partnerships. Bonneville Research offers a diverse array of economic analysis and tools to answer complex problems.
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  • Economic Development Plans
  • Demand Assessment for Public and Cultural Facilities
  • Public-Private Partnerships
  • Economic and Fiscal Impact
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Fusing talents of a multi-disciplined staff, the firm's experience has concentrated in four interrelated fields:

  • Economic development and community planning
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In This Issue
SCORECARD
Economic Notes
New State-Issued Bonds
Which states will recover first?
General Growth Bankruptcy
This Weeks Leads:
Public Policy Initiatives
Recent Bonneville Research Projects:
OECD data hint at recovery in leading nations
 
Most of the world's advanced economies are close to emerging from recession according to the Organisation for Economic Co-operation and Development reported that a "possible trough" had been reached in April in its monthly analysis of forward-looking indicators in more developed countries that make up almost three-quarters of the world's gross domestic product.
The composite leading indicators index for the 30 economies that are part of the OECD rose 0.5 points in April, the second monthly rise in a row, after falling for the prior 21 months. The index seeks to identify turning points in the cycle about six months in advance.
The Paris-based international organisation said its overall measure of the advanced economies that are its members - ranging from the euro area and the UK to the US, Mexico and Japan - now pointed to "recovery" instead of the "strong slowdown" they had been suffering since last August.
Source: The Financial Times, London, 2009

 
General Growth Bankruptcy Facing Challenges
 
General Growth Properties' bankruptcy proceedings are turning out to be every bit as complicated as commercial real estate industry experts feared. The firm is in a pitched battle with some of its creditors over the inclusion of some malls in the filing and hearings on the assets could drag on for weeks. The REIT might also be forced to pay unforeseen administrative fees in the aftermath of its debtor-in-possession financing auction. Meanwhile, aside from its in-court drama, the REIT has quietly appointed a controversial new member to its board of directors-hedge fund investor William A. Ackman, founder and managing member of Pershing Square Capital Management, L.P.

The most serious obstacles General Growth faces are motions by lenders seeking to dismiss bankruptcy filings for a number of its malls claiming the properties in question are not in financial distress and don't need to be rehabilitated through Chapter 11. Furthermore, the lenders claim that since the REIT owns the properties through special service entities, accepting their bankrupt status would shake investors' and lenders' confidence in such vehicles.
 
Source: Retail Traffic Online
This Weeks Leads:
  
Wendy's
Wendy's International, Inc. trades as Wendy's at 6,600 locations nationwide and internationally.  The fast food restaurants occupy spaces of 2,800 sq.ft. to 3,300 sq.ft.  Growth opportunities are sought nationwide during the coming 18 months.  Typical leases run 15 years with 15-year options.  Preferred demographics include a population of 20,000 within two miles.  A land area of one acre is required for freestanding locations.
For more information, contact Kris Kaffenbarger, Wendy's International, Inc., One Dave Thomas Boulevard, Dublin, OH 43017
 
Chao Praya Chinese Eatery, Ichiban Japan, Fuji Express and Burgers-N-Cr�me
Chao Praya Chinese Eatery trades as Chao Praya Chinese Eatery, Ichiban Japan, Fuji Express and Burgers-N-Cr�me at 10 locations throughout AR, KY, LA, MS, NC, OK, TN, VA and WA.  Chao Praya Chinese Eatery, Ichiban Japan and Fuji Express occupy spaces of 500 sq.ft. to 650 sq.ft. in regional enclosed malls and food courts, with expansion sought nationwide during the coming 18 months.  Burgers-N-Cr�me occupies spaces of 2,800 sq.ft. to 3,000 sq.ft. in endcaps and inline spaces, with expansion sought throughout the existing markets during the coming 18 months.  Typical leases run 10 years.  A vanilla shell is required.  Preferred cotenants include Dillard's, JCPenney, Macy's and Sears.  Preferred demographics include a population of 200,000 within 10 miles earning $30,000 as the average household income.
For more information, contact Brian Wiley, Chao Praya Chinese Eatery, 1880 Lakeland Drive, Suite 3, Jackson, MS 39216


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Public Policy Initiatives
 
VA - Kaine Announces Funds to Rehabilitate Foreclosed Homes. Gov. Tim Kaine announced the award of $17.5 million in Neighborhood Stabilization Funding to localities for purchasing and rehabilitating foreclosed homes so that they can be resold to low-to-moderate income families. "We have worked quickly to put together an effective program to address the impact of foreclosures across the state," Gov. Kaine said. "Virginia is not immune from our national economic problems, and we are continuing to take steps to ease the housing crisis by finding and applying solutions."
http://www.allamericanpatriots.com/4foreclosed
 
DE - Markell Launches Website Helping Businesses Compete for State Work. Gov. Jack Markell announced the launch of the State's new online portal for agency bid solicitations. "This new one-stop site could bring more businesses and more bids to the table to help drive down costs on everyday items. It lets companies put people to work to build their business and create jobs instead of having to track dozens of sites to be sure they do not miss a chance to offer better prices or service to the state," Markell said. http://www.ledgerdelaware.com503966.txt
 
WA - Gregoire Announces Transportation Projects. Gov. Chris Gregoire announced that Washington state will deliver more highway projects with American Recovery and Reinvestment Act funds than first envisioned, thanks to the recent trend toward lower construction bids. "At a time when every penny counts, these lower construction cost estimates will provide more opportunities for infrastructure improvements," Gov. Gregoire said. "We are seeing the benefits of managing these recovery funds efficiently and effectively as required by the Obama administration." http://www..allamericanpatriots.com/transportation-p
 
NM - Richardson Breaks Ground on Interstate Recovery Project. Gov. Bill Richardson, joined by state and local officials, broke ground on the Interstate 40 Paseo del Volcan Recovery project, a $27 million dollar project that is the fourth transportation project funded through the American Recovery and Reinvestment Act to get underway in New Mexico. "This project and each of our transportation projects does exactly what the recovery act is designed to do- create jobs, build and improve our national infrastructure, and pump money into our local economies," said Gov. Richardson. http://www.allamericanpatriots.com/arra-project

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Recent Bonneville Research Projects:
 
Urban Renewal & Economic Development - Taylorsville, Utah
 
The City of Taylorsville, Utah, prior to incorporation in 1996, was known as Taylorsville-Bennion. Taylorsville is bordered by West Valley City to the north, Murray City West Jordan City to the south, and Kearns to the west, and has a population of 57,439.  Bonneville Research is currently working with the City of Taylorsville to evaluate the potential of establishing Urban Renewal Project Areas for four sites, and one Economic Development Area. Bonneville Research is preparing a "blight" analysis to evaluate the potential of establishing any or all of the areas as an Urban Renewal (Redevelopment) Project Area and thus eligible for tax increment financing (TIF). The preliminary Bonneville Research Urban Renewal (RDA) Bight Analysis has resulted recommending one site not be considered as an Project Area.
 
Contact: Keith Snarr, Taylorsville Economic Development Director, (801) 963-5400