Look for more growth in 2012, years ahead
The second half of 2011 was a period of very strong growth in the Northern Colorado economy. This growth was led by the construction sector, both residential and institutional, and a large reduction in the number of bankruptcies, undoubtedly caused by fewer foreclosures and underwater mortgages ending in bankruptcy. The housing sector and consumers, in general, are rapidly deleveraging and learning to live within a new spending equilibrium.
The annual monthly growth rate has been at or well above 20 percent for seven months through January. This degree of strength hasn't been seen since 1993, when the U.S. was coming out of the 1991-1992 recession. This strength is the result of very weak growth in the last half of 2010 and should carry through the first half of 2012 compared to the weaker first half of 2011. The growth rate will slow in the second half of 2012 compared to the second half of 2011.
The trend line in the Index of Economic Growth graph has turned up. The trend line is calculated using a filter that weights recent data more heavily and diminishes to zero for data more than two years old. So, when the trend line turns up, the data series is truly recovering.
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