Employment growth in the past 12 months varied considerably among Rocky Mountain States. As of March 2002, Wyoming led the region with a 1.8- percent annual growth rate. At the other end of the spectrum, Colorado’s annual rate of change fell to –2.5 percent, and employment in the State was down in March for the 15th consecutive month. Employment in Montana and North Dakota has changed little from last year, whereas South Dakota and Utah’s job levels for March declined 1.2 percent compared with last year. Utah’s drop in employment was the seventh loss of the past 8 months. The only recent increase occurred in January 2002, when the seasonally adjusted number was boosted by preparations for the Winter Olympics. Unemployment rates for March 2002 are up in all States of the region from 1 year ago, with the largest increase coming in Colorado, up from 3.0 percent to 5.6 percent. Although unemployment rates in North and South Dakota also were up from last year to 3.1 percent and 3.2 percent, respectively, they were the two lowest unemployment rates in the Nation in March.

Residential building activity in the region during the first quarter of 2002 was down almost 10 percent from the first quarter of 2001. A significant cutback in Colorado coupled with a small decline in Utah overshadowed increases in the remaining States. Montana and North Dakota posted large percentage increases, but total permit numbers remained modest. Regionally, the 11-percent drop in single-family permits was more pronounced than the 3.8-percent cutback in the multifamily sector.

The single-family mortgage foreclosure rate for the region jumped again in the fourth quarter of 2001, spurred by another major increase in foreclosures in Utah. Rates in the other States also moved up, but these increases were small. The region’s overall foreclosure rate of 0.81 percent is below the national rate and varies from a low of 0.49 percent in Colorado to a high of 1.74 percent in Utah. Similarly, Utah’s delinquency rate is up to almost 5.5 percent whereas rates in the other States are in the 2.5- to 3.5-percent range.

The Denver metropolitan area economy in 2001 pulled back from strong growth in 2000, and news from the first quarter of 2002 does not suggest a quick recovery. Nonagricultural employment in March 2002 was down by 36,100 jobs from March 2001. Average employment for the 12 months ending in March 2002 was 1.2 percent lower than the level of 1 year ago. The unemployment rate began 2001 close to 2 percent but climbed to almost 6 percent by March 2002. Recent layoff announcements read like a Who’s Who in telecommunications, as Qwest, Avaya, Level 3, and Rhythms NetConnections all made major payroll cuts in 2001. Other high-technology companies and the airlines also retrenched, and the upcoming closing of Merrill Lynch’s Meridian complex will add financial services to the list of local industries battered by the current recession. Denver’s recovery may have to wait for more encouraging news on business investment in high-technology and telecommunications products at the national level.

Apartment construction in the Denver area is ahead of last year’s pace, even as the renter vacancy rate heads toward the double digits. The Apartment Association of Metro Denver’s survey revealed vacancy rate increases in each quarter of 2001, with the rate reaching 8.7 percent by the fourth quarter. More increases are likely as the many apartment properties under construction last year enter the market. Rent concessions are common in projects in initial leaseup and have become more widespread in the overall market. The local home sales market is performing better than the rental market in the current slowdown. Builders are offering some discounts to sell new homes, but the existing home market remains active. The Denver Board of REALTORS^® reported that existing home sales and the average sales price of just under $240,000 in the metropolitan area were both up 5 to 6 percent in the first quarter of 2002 from 1 year ago. However, sales price increases have been slipping below the double-digit gains in earlier years.

The Salt Lake City area’s unemployment rate in March jumped to 5.9 percent from 5.5 percent recorded the previous month and 4.0 percent 1 year ago. Layoffs in high technology and other sectors continued to push the number of unemployed workers to record high levels. Also contributing to the increase was the completion of the 2002 Winter Olympics in February; many temporary workers associated with the games were unemployed by March. Wage and salary employment in March was off 1.3 percent from a year ago and off 0.4 percent from February 2002. The decline in employment was greatest in the services sector, where many of the temporary Olympic jobs were classified.

Salt Lake City’s slower economy has dampened housing demand. The Wasatch Front Multiple Listing Service reported an 11.8-percent decrease in existing single-family home sales activity through the first quarter of 2002. The average sales price for new single-family homes declined by 2.6 percent to $161,780. The rental market is now more competitive because of the departure of Olympics workers and the release of several hundred rental units held off the market for the games. Although Hendricks & Partners’ fourth-quarter 2001 survey showed a vacancy rate of 5.3 percent, local housing officials expected that by March 2002 the rate could be 2 to 4 percentage points higher. Concessions are more common and rent increases, if any, are small. Because much of the Olympics-related activity and housing was located in downtown Salt Lake City, this submarket felt the brunt of the post-Olympics competition for tenants. Nevertheless, with very few other apartment units under construction or coming online in 2002, the market throughout the metropolitan area should begin to improve by the end of the year.