Revised employment estimates for 1997 show that job growth in the Rocky Mountain region is once again ahead of the national job growth rate. Colorado's annual growth rate went from less than 2 percent to almost 4 percent. Montana saw a small upward revision, and North Dakota's job total was revised downward. A minor downward revision in Utah did not dislodge the State from its position as the fastest growing State in the region and one of the fastest in the Nation. The revised figures indicate that total employment growth in the region for 1996 and 1997 slowed from the growth in 1995.

Utah's 4-percent gain in employment (comparing March 1998 with March 1997) led the region, and Colorado was close behind with an increase of 3.4 percent. Wyoming's growth has not been more than 1 percent since mid-1997; Montana, North Dakota, and South Dakota continued to post annual employment gains of close to 2 percent.

Unemployment rates in March 1998 were up from the previous year in all Rocky Mountain States, but the changes were minimal for the most part. North Dakota's rate of 2.3 percent remained the second lowest in the Nation. Despite some upward movement in March, rates are down or unchanged from 1997. Stories of employers having difficulty finding qualified workers are beginning to sound like old news. Still, a recent survey of Colorado manufacturers revealed that 73 percent believed that the shortage of qualified workers would adversely affect their businesses in the coming year.

The Salt Lake City area's high-technology sector will face some uncertainty with the Asian economic crisis that, if prolonged, may result in some local downsizing or overseas shifting of operations. On the positive side, Gateway USA is locating some of its computer manufacturers and services to the area. Micron Technologies, Inc., is slowly expanding its administrative and testing staff at its unfinished semiconductor manufacturing plant in Lehi, Utah. Intel Corporation is considering locating a huge research and development complex in Riverton, Utah.

The high-technology sector in the Denver-Boulder corridor continues to expand, bolstered by the recent announcement that Level 3 Communications will move its headquarters there. Level 3 will join Sun Microsystems in anchoring what promises to be a major concentration of high-technology employment. Meanwhile, some high-technology employers are spending money to relocate employees and to attend career fairs all over the country because they cannot fill jobs locally.

Residential building activity in the region in the first quarter of 1998 was 13 percent ahead of last year's pace, but the picture was mixed in the major markets. The Denver area's multifamily activity was above the record pace of 1997, and the Salt Lake City area's multifamily activity was up, but the level remained low. Single-family homebuilding was up in the Colorado markets but down in the Salt Lake City area.

Rental housing markets in the region's largest metropolitan areas remained balanced, although vacancies have climbed steadily in Salt Lake City. The fourth-quarter 1997 renter vacancy rate of 5.1 percent was up almost a full percentage point from the fourth-quarter rate of 1996. This increase was hardly cause for alarm, but it raised some eyebrows in an area used to rates in the 3- to 4-percent range. However, with the cutback in multifamily permits in 1997, the rate will likely decline by the second half of 1998. Colorado Springs saw its renter vacancy rate climb to almost 6 percent in the first quarter of 1998. That rate will likely remain about the same during most of 1998 as the supply of new units coming on line is absorbed. The market cannot be characterized as soft, but it appears that the pent-up demand from earlier in the decade has been satisfied. Denver's renter vacancy rate was unchanged in the fourth quarter of 1997 but may creep up in 1998 as last year's surge in multifamily activity is completed.

After setting a record in 1997, the pace of home sales in Denver has not slowed. Sales in the first quarter of 1998 were up almost 10 percent from the first quarter of 1997. A jump of almost 20 percent in condominium sales helped push up the overall increase. Activity in the condominium market was partially fueled by the increasing prices of single-family homes, which, in turn, increased the prices in the condominium market. The average single-family home price in the first quarter of 1998 was up almost 10 percent from 1997, and the average condominium price increased by more than 26 percent.

Affordable housing is receiving more attention at the local level. A recent survey by the Colorado Municipal League found that almost 70 percent of municipal officials cited the lack of affordable housing as a problem they will face in 1998. Many cities are taking action. For example, the Metro Mayors' Caucus -- an affiliation of 31 Denver-area mayors -- recently announced a pooling of bond authority to provide low-interest loans for first-time homebuyers throughout the metropolitan area. The caucus has already developed a housing resource cookbook and is challenging its member communities to make regulation changes that can help lower the cost of developing housing in their communities.

Spotlight on Provo-Orem, Utah

Provo-Orem's economy has slowed from the rapid growth of the past several years, largely as a result of 2,000 positions that were eliminated at Novell, Inc., a major computer software company in the area. Offsetting this loss were gains in employment by new computer software firms that had located in the area. Other areas of growth were in health services, colleges and universities, and nonresidential construction. Employment in the area grew by 4 percent in 1997 and by more than 6 percent in 1996. Despite the layoffs at Novell, the average annual unemployment rate fell to 2.6 percent in 1997.

The employment slowdown that began in 1997 should turn around in 1998. The employment level at Novell bottomed out and is expected to begin increasing over the next few years. A surge in nonresidential construction permits last year will keep this sector active in 1998. Among the larger projects are two large shopping malls with a combined cost of more than $130 million. Brigham Young University (BYU) is adding classroom and family apartment buildings to handle an expected addition of 2,000 full-time students, which will bring enrollment to about 31,000 full-time students. Expansions worth $100 million at two area hospitals will be completed in the next few years. In addition, the first of two office towers is under construction on the Novell site in Provo, and Micron, Inc., is opening up a test facility that will add 250 workers to its Lehi semiconductor plant.

The area's home sales market has seen prices pushed up by high-income households that moved to the area during the early 1990s. In-migration has slowed, but home prices have not yet fallen. New homes are being built in move-up and higher price ranges because of high-impact fees for sewers, schools, and other infrastructure improvements and larger required lot sizes. The move-up price range is from $150,000 to $250,000, and homes on large lots (2 or 3 acres) are priced at $300,000 and above.

Single-family home sales in the Provo-Orem area were down by more than 10 percent for the first quarter of 1998, and active listings in March were up by 4 percent compared with the previous year. The average existing single-family home price increased by 10 percent to more than $168,000 in first-quarter 1998 compared with first-quarter 1997 prices.

The market tightness for townhouses and condominiums has eased somewhat because of the large supply that came on line in 1997. The excess inventory is not expected to last long, however; the average sales price declined slightly to about $102,000, which has encouraged a surge in sales so far in 1998.

Sales housing construction will likely continue to slow because of a shortage of land as well as restrictions placed by local jurisdictions. There is very little possibility of any large subdivision development in Provo or Orem. Construction of single-family homes will continue to be concentrated in the smaller communities, especially in the corridor towns leading to Salt Lake City.

Rental housing market conditions are not as tight as they once were. The first significant large-scale apartment construction in years added more than 1,000 apartment units to the area in the past 2 years. Other factors contributing to the easing of market pressure were the construction of new student family units at BYU, lower condominium prices, and low interest rates. Despite these factors, new apartment projects have leased up without major concessions, and the renter vacancy rate remains under 5 percent. The market for student households is tight and will continue to be so as enrollment increases.