Eagle County business: ‘People are willing to start projects now’
June 1, 2013
EAGLE COUNTY — The stock market has been on a roll since the first of the year, the nation's standard measure of unemployment is down and interest rates are at historic lows.
There's still plenty of disconcerting economic news in the land — labor force participation, for instance. Still there's been enough good news that the Consumer Confidence Index, a national survey prepared by the nonprofit group The Conference Board, is up to levels not seen since February of 2008. That confidence is starting to be reflected in local business.
Real estate transactions are increasing, and prices of lower-priced units are starting to rise, too. And, while boom-time activity remains just a memory, there's a noticeable amount of new construction in the county this spring.
The people running those projects, as well as remodeling jobs, are starting to show up at Ruggs Benedict in Avon. Store owner Roger Benedict said the number of people in his store hasn't increased much since last year.
But, he said, people seem willing to pay a bit more per square foot for their floor coverings these days.
More important, Benedict said, are those who have decided now's the time to start a project instead of waiting to see what the next few months bring.
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"We've been riding this since March," Benedict said.
In Lionshead, Double Diamond Ski Shop general manager Matt Carroll said it's obviously too soon to see what the summer will bring, but the winter showed consumers in something of a spending mood.
"People were more willing to spend," Carroll said. "They were less price conscious. Hopefully that will continue into the summer."
If the nation's stock markets continue their rapid rise, that might be good news for the next few months.
The Dow Jones Industrial Average, the most commonly quoted indicator of the New York Stock Exchange's strength, has risen more than 2,000 points since the first session of 2013. The Dow rose roughly 1,000 points in all of 2012.
The stock market isn't the only measure of consumer confidence, of course, but it's an important one. Ralf Garrison of the Mountain Travel Research Program studies all kinds of economic indicators as part of his work evaluating the health of mountain resorts. Garrison said consumer confidence generally lags the Dow by a couple of months. That's right in line with what Benedict has seen at his store.
And, Garrison said, the current market advance has been going on long enough to qualify as a full-blown trend.
"One month isn't a trend," he said. "This has been going on since January."
While the Consumer Confidence Index has been edging up the last few months, Garrison said the overall number — 76.2 — still isn't at the point where analysts consider the nation's economy to be in a real spending mode. That number is 100, with historic highs above 140 coming in 1966, 1967 and 2000.
Conversely, The Conference Board considers numbers below 50 to indicate an economic depression.
The historic low, 25, came in February, 2009, in the depths of the current economic slump.
The current comeback in confidence, combined with what Garrison calls Americans' view of travel as a kind of "birthright," is good news for local businesses.
Still, there's a way to go before the index hits its benchmark point of 100, much less its historic highs.
With plenty of economic problems still lurking, many consumers are traveling, but perhaps holding back a bit.
While spending is certainly better than it was in 2009 — when people still came to the Vail Valley, but didn't spend much while here — it's not entirely back to pre-recession levels.
"We're seeing relatively flat sales," said Kevin Clair, owner of Vail restaurants Sweet Basil and Mountain Standard. "There hasn't been much per-person increase in a couple of years."
Clair said customers at his restaurants "seem to be holding back."
"It seems like they're saying 'We're going to live our lives, but maybe be a little less exuberant,'" he said.
But Clair, a longtime veteran of the valley's restaurant business, said he's "guardedly optimistic" about prospects for the summer.
If the Dow keeps climbing, perhaps more of that old exuberance will return.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2939 or at email@example.com.