Southwest Business ForumJanuary 11, 2008

Fort Lewis College’s 16th Annual Focus on Our Future:

Business and EconomicsSponsored by Wells Fargo San

Juan Market

The La Plata County Economy

Region 9 Population

Source: U.S. Census Bureau

  La Plata Montezuma Archuleta DoloresSan Juan

2007 48,563 25,439 12,777 1,921 582

2006 47,936 25,217 12,386 1,911 578

2005 47,230 24,767 11,882 1,809 568

Region 9 Population Growth

Source: U.S. Census Bureau

0%

1%

2%

3%

4%

5%

6%

2000 to2001

2001 to2002

2002 to2003

2003 to2004

2004 to2005

2005 to2006

2006 to2007

An

nu

al G

row

th in

Po

pu

lati

on

La Plata

Montezuma

Archuleta

Region 9 Annual Wages

Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System. Most recent data available.

$20,000

$22,000

$24,000

$26,000

$28,000

$30,000

$32,000

$34,000

2001 2002 2003 2004 2005 2006 2007

An

nu

al W

ag

es

Archuleta

La Plata

Montezuma

Region 9 Annual Wage Growth

Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System. Most recent data available.

-1%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2001 to2002

2002 to2003

2003 to2004

2004 to2005

2005 to2006

2006 to2007

An

nu

al G

row

th in

Wa

ge

s

Archuleta

La Plata

Montezuma

Region 9 Unemployment Rate

Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System. Most recent data available.

0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007

Un

em

plo

ym

en

t R

ate

Archuleta

La Plata

Montezuma

Major Industries in Region 9

Industry 2001 2006 Change

Trade, Transportation and Utilities 26.1% 23.2% -2.9%Leisure and Hospitality 23.2% 20.4% -2.8%

Construction 10.3% 14.7% +4.4%Education and Health Services 14.2% 13.5% -0.7%

Professional and Business Services

8.4% 10.3% +1.9%

Source: Colorado Department of Labor and Employment

Tourism

Tourism Includes:1. Airport Passengers

2. Train Ridership

3. Mesa Verde Visitors

4. Lodger’s Tax Collected

5. Skier Boarder Visits

Airport Passenger Activity Percent Change By Year (1995-2007e)

Source: Durango - La Plata County Airport

e = estimate

2%

5%4%

-11%-8%

1%

12%

-13%

8%6%

12%

7%

-15%

-10%

-5%

0%

5%

10%

15%

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

Pe

rce

nt C

ha

ng

e

Year

Train Passenger Activity Percent Change By Year (2001-2007e)

Source: Durango & Silverton Narrow Gauge Railroad

e = estimate

-32.8

24.7

3.3

-1.2

0.5

-0.5

-40

-30

-20

-10

0

10

20

30

2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Pe

rce

nt C

ha

ng

e

Year

Mesa Verde Visitors Percent Change By Year (1995-2007e)

Source: National Park Service Public Use Statistics Office

e = estimate

-6.9

2.4

-3.9

5.2

-28

14

-22

9.6

2.1

10.6 11

2

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

1995-1996 1997-1998 1999-2000 2001-2002 2003-2004 2005-2006

Pe

rce

nt C

ha

ng

e

Year

Lodger’s Tax Revenue (in 1995 $s)Percent Change By Year (1995-2007e)

Sources: City of Durango and La Plata County

e = estimate

-2.2% -0.4%

4.0%0.7%

-1.9% -2.9%

-19.9%

4.5%6.2%

-0.6%

7.2%8.90%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

1995-1996 1997-1998 1999-2000 2001-2002 2003-2004 2005-2006

Per

cent

Cha

nge

Year

Skier/Boarder VisitsYear United States

(millions)

Purgatory (DMR)

2000/01 57.3 322,000

2001/02 54.4 251,000

2002/03 57.6 236,000

2003/04 57.1 268,000

2004/05 56.9 278,000

2005/06 58.8 211,000

2006/07 60.4 217,000e

Sources: National Ski Association and Annual Reports

e = estimate with regression

Retail Sales(Adjusted for Inflation)

An indicator of tourism activity as well as population growth.

Retail Sales (in 1995 $s)Percent Change By Year (1995-2007e)

3.2

-0.6

6.6

3.2

6.2

0.8 0.8 0.9

14.6

1.4

9.2

5.3

-2

0

2

4

6

8

10

12

14

16

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

Pe

rce

nt C

ha

ng

e

Year

Source: Colorado Department of Revenue

e = estimate

Employment

Indicates job growth in the economy.

EmploymentPercent Change By Year (1995-2007e)

1 1.62.5

0.32.1

-5.8

12.6

0.2

6.54.9

7.28.3

-10

-5

0

5

10

15

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007P

erc

en

t Ch

an

ge

Year

Source: Colorado Department of Labor and Employment

e = estimate

2008 Tourism, Retail, & Employment Outlook

Tourism: Dependent upon discretionary spending

Retail: Cushioned by local spending

Employment: Stable unemployment; lower wages

Agriculture

Includes Calf Prices and Alfalfa Hay Prices – adjusted for inflation.

A better measure would be sales, but these numbers are not available.

Alfalfa Hay PricesPercent Change By Year (1995-2007e)

-1.4

15.7

-13.2

-20.3-9.2

35.9

3.3

12.4

-0.3

12.3

5.6

17.2

-30

-20

-10

0

10

20

30

40

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

Pe

rce

nt C

ha

ng

e

Year

Source: U. S. Department of Agriculture - Economics, Statistics and Market Information System

e = estimate

Calf Prices, Adjusted Dollar Value per Cut WeightPercent Change By Year (1995-2007e)

-23

40.1

-5

5.712.7

-5.4 -14

12.418.3

9.8

-1.1 -11

-30

-20

-10

0

10

20

30

40

50

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007P

erc

en

t Ch

an

ge

Year

Source: U. S. Department of Agriculture - Economics, Statistics and Market Information System

e = estimate

2008 Agriculture Outlook

Increased prices in field-based commodity prices Drought across nation Corn-based ethanol

Decreased prices in calf prices Not passing input costs to consumer Ranchers/farmers not buying calves with increased feed

costs

Industrial Kilowatt-Hours

Used as an indicator of industrial activity in the county.

Most industrial usage of electricity in the county is to compress natural gas for transmission through gas pipelines

Industrial Kilowatt HoursPercent Change By Year (1995-2007e)

9.16.6

50.9

-6.3

6.910.2

-7.3

6.5 7

-2.3

0.5

-0.5

-20

-10

0

10

20

30

40

50

60

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

Pe

rce

nt C

ha

ng

e

Year

Source: La Plata Electric Association Inc.

e = estimate

2007-2008 Observations for Oil & Gas

Given the current regulations in the oil & gas industry, the region is producing natural gas near full capacity

Certain market pundits are calling this the year of natural gas

Fort Lewis College Enrollment

The college stabilizes the economy because of higher enrollment in the fall and winter months. This offsets some of the decline in tourism during this time period.

Fort Lewis College Enrollment (Fall)Percent Change By Year (1995-2007)

6.2%

2.1%

-0.4% -2.8%

1.0%

-1.6%

3.6%

-2.1%-3.8%

0.2%

-5.8%

-1.0%

0.7%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

Perc

ent C

hang

e

Year

Source: Fort Lewis College

2008 Fort Lewis College Outlook

Increased admission standards at FLC Comparable with UC-Boulder and CSU

Slight dip in enrollment last several years

Intermediate-term goal is 5,000 students

Residential Real Estate

Median Price for La Plata County is used in the index.

Median Home Price of Single-Family Homes in La Plata County

Median Home Price

$0$50,000

$100,000$150,000$200,000$250,000$300,000$350,000$400,000

2003 2004 2005 2006 2007

Percentage Change in Price of Single-Family Homes in La Plata County

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

2003 to 2004 2004 to 2005 2005 to 2006 2006 to 2007

% C

ha

ng

e in

Me

dia

n H

om

e P

ric

e

Average Days on Market of Single-Family Homes in La Plata County

Average Days On Market

135

140

145

150

155

160

165

2003 2004 2005 2006 2007

Median Home Price of Condos/Town Homes in La Plata County

Median Home Price

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

2003 2004 2005 2006 2007

Total Number of Transactions ofCondos/Town Homes in La Plata County

Total # of Transactions

0

100

200

300

400

500

2003 2004 2005 2006 2007

Median Home Price Change of Single-Family Homes in In-Town Durango

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

2003 to 2004 2004 to 2005 2005 to 2006 2006 to 2007

% C

ha

ng

e in

Me

dia

n H

om

e P

ric

e

Days on Market of Single-Family Homes in In-Town Durango

Average Days On Market

020406080

100120140160

2003 2004 2005 2006 2007

Building Permits

This indicator uses the adjusted dollar valuation of the properties for which permits were issued—thereby measuring the dollar value (as assessed) of new construction in La Plata County.

Building Permits (Construction)Percent Change By Year (2002-2007e)

Sources: La Plata County Building Department, City of Durango Planning and Community Development Department

e = estimate

28%25%

-19%

-7%

-24%-30%

-20%

-10%

0%

10%

20%

30%

40%

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Pe

rce

nt C

ha

ng

e

Year

2008 Real Estate Outlook

Rest of the nation bracing for worst real estate correction since the Depression

National builders report a bottom is not in place Single-family homes = healthy correction Condos/Town Homes = less healthy correction Building permits = significant decline

Bank Deposits

An important indicator of the economic health of the community.

Also an indicator of the ability of local banks to make loans to consumers and business borrowers.

Bank Deposits (Unadjusted)

Source: Federal Deposit Insurance Corporation

June 30th Deposits Year to Year % Change

2002 $615,000,000

2003 $702,000,000 +14.2

2004 $778,000,000 +10.8

2005 $874,000,000 +12.3

2006 $1,020,000,000 +16.7

2007 $1,034,000,000 +1.4

InflationDurango Price Index (DPI)

Monitors the change in the price of goods and services in our region

Durango Price Index Adjust Denver CPI for Durango housing and

income levels Assumes similar other expenditure patterns as

Denver consumers

Durango Price Index versus Denver CPI

100.00

102.00

104.00

106.00

108.00

110.00

112.00

114.00

2001

.1

2002

.1

2003

.1

2004

.1

2005

.1

2006

.1

2007

.1

Pri

ce

Ind

ex

DPI

Denver CPI

Annual Inflation Rate: Durango vs. Denver

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2001 to 20022002 to 20032003 to 20042004 to 20052005 to 20062006 to 2007

An

nu

al I

nfl

ati

on

Ra

te

Durango

Denver

Weight of Housing Costs: Durango vs. Denver

0.15

0.20

0.25

0.30

0.35

0.402

00

1

20

01

20

02

20

02

20

03

20

03

20

04

20

04

20

05

20

05

20

06

20

06

20

07

We

igh

t o

f H

ou

sin

g C

os

ts

DPI

Denver CPI

2008 Inflation Outlook

Durango housing rents will probably increase

Increased expenses in commodity prices

Decreased consumer spending

Our Web Address:

http://soba.fortlewis.edu/econoweb/

Thank You!