Economy

Composition of the Durango/La Plata County Economy

Introduction:

The Durango area has several economic as well as quality-of-life advantages for businesses planning an expansion and/or better service to their southwestern markets. Durango has a very well-educated work force. Also, wage levels are substantially lower than comparable wages in the Denver area.

Durango and La Plata County are located at some distance from the urban areas of the cities of the Colorado Front Range and the urban areas of Arizona and New Mexico. However, Durango is very cosmopolitan in its economic and cultural makeup. The area is the center for medical care for northwestern New Mexico, southeastern Utah, and southwestern Colorado. In addition, Durango is fortunate to be the location of Fort Lewis College, a fully accredited, four-year liberal arts, state-supported institution of hi gher education. The area also attracts well-educated retired persons who add their experience and knowledge to the local resource base. Thus, the community and county remain quite sophisticated in atmosphere and human resource base.

What Sectors Employ Durango Workers:

Retail and service sectors currently employ the largest share of employees in La Plata County. Table 1-5 provides this information for La Plata County and for Colorado. Table I-5 illustrates the distribution of employment by major industry in 1994. The concentration of employment in retail trade and services reflects the importance of tourism to the local economy. The retail and services sectors are relatively larger in the local economy than they are in the statewide economy. Also, the manu facturing sector is relatively smaller in the local economy than is true statewide.

TABLE I-5

Employment by Major Industry
La Plata County and Colorado, 1994*

La Plata County	Percentage Dist.	State of Colorado	Percentage Dist.
Major Industry
Ag., For.	210	1.3%	24,754	1.5%
Mining	244	1.5	15,200	0.9
Construction	1,387	8.1	84,800	5.0
Manufacturing	612	3.6	191,000	11.1
Transportation	614	3.6	103,400	6.0
Wholesale	561	3.3	90,300	5.2
Retail	4,075	23.4	332,700	19.0
Finance	800	4.7	109,200	6.3
Services	5,766	33.2	484,100	27.8
Public Sector	2,969	17.3	298,700	17.2
Totals	17,238	100.0%	1,734,154	100.0%

*SOURCE: Colorado, Division of Labor and Employment, Colorado Employment and Wages Quarterly, Second Quarter, 1994, pp.71-72, and Federal Reserve Bank of Kansas City, Regional Economic Digest, Fourth Quarter, 1994, p. 13.

Retail Sales by Business Class

The La Plata County economy is very reliant upon tourism. The impact of tourist spending on retail sales in the county is great. It should be noted that those businesses that sell at the wholesale level or that produce goods for consumption elsewhere will not be a part of the county's retail sales volume. Some manufacturing and wholesale companies as well as the agricultural sector of the county fall into this category.

Retail sales do provide an important insight into those sectors which provide the base for sales tax collections. Retail sales provide the city, county, and state with a significant portion of their total tax base. Table II-5 provides this information for thec ounty and the state. As might be expected, hotels and motels and eating and drinking establishments are relatively larger in the local economy than in the state economy, while manufacturing and wholesali ng are relatively smaller in the local economy than in the state.

TABLE II-5

Retail Sales, La Plata County and Colorado By Business Class 1993-94*

Business Class	La Plata County ($1,000)	Percentage Dist.	State of Colorado ($1,000)	Percentage Dist.
Agriculture	$ 4,010	0.7%	$ 267,291	0.5%
Mining	6,067	1.0	386,063	0.7
Construction	20,666	3.4	1,317,741	2.1
Manufact.	11,767	2.0	4,398,124	7.0
Transport. & Pub. Util.	49,338	8.1	4,995,891	8.0
Wholesale	34,920	5.7	5,401,998	8.6
Building Mat.	52,775	8.7	3,317,188	5.3
General Merch.	21,267	3.5	4,153,787	6.6
Food Stores	75,863	12.2	6,078,143	9.5
Auto Dealers & Serv. Stations	78,830	12.7	9,819,459	15.5
Apparel	17,643	2.9	1,242,711	2.0
Furniture	18,224	3.0	2,671,447	4.3
Eat and Drink	45,908	7.5	3,779,954	6.1
Misc. Retail	63,266	10.2	5,275,649	8.4
Finance, Ins. & Real Estate	5,456	0.9	513,022	0.9
Hotels & Lodg.	45,429	7.5	1,283,560	2.1
Other Services	-	-	7,575,990	11.9
Government	-	-	143,224	0.3
Miscellaneous	61,127	10.0	172,136	0.2
TOTALS	$612,556	100.0	$62,863,370	100.0

*SOURCE: Colorado Department of Revenue, Annual Report, 1994. Retail Sales by Business Class and County, pp. 65-66, and Office of Tax Analysis.

What We Produce-by Productive Activity

There are various ways to measure the different shares of economic activity generated by different segments of the La Plata County economy. It becomes very difficult to assign values to these shares because some industries simply bring in products at wholesale while others create their inventories themselves. Also, some businesses operate solely at the wholesale level while others sell at retail and therefore generate large amounts of revenues subject to the sales tax. One way to compensate for these measurement shortcomings is to present a variety of measures of economic activity which, we hope, will provide sufficient information to allow for the weighting of the different facets of each sector. Table III-5 provides data on economic activity measured by dollar values of sales or receipts by private sector activity, according to the most recent census reports available. Along with the dollar amounts, multipliers are presented that give some idea as to the degree to which the different sectors create their own products (are part of our key industries) or the degree to which each sector relies on the importation of goods for its inventories. A sector with a large multiplier is one which creates its own products, whereas an industry with a lower multiplier relies on products brought in from elsewhere.

TABLE III-5

Economic Activity as Measured by Dollar Values and Type II Multipliers*

Activity	Value Sales ($1,000)	Multiplier	Leakage out of Economy
Retail Trade	$209,082	1.5	66%
Durango	175,247	-	-
Balance of County	33,836	-	-
Manufacturing	**	1.4	71%
Wholesale Trade	89,154	1.3	76%
Durango	54,325	-	-
Balance of County	34,829	-	-
Services	102,212	1.3	76%
Durango	81,600	-	-
Balance of County	20,612	-	-
Agriculture	14,248	3.4	29%

*SOURCE: 1987 Census of Retail Trade, Manufacturing, Wholesale Trade, and Services, 1992 Census of Agriculture, U.S. Department of Commerce, Bureau of the Census, 1987 and 1992. Also, "The Economy of Southwest Colorado, Description and Analysis," John R. McKean, Department of Agricultural and Natural Resource Economics, Colorado State University, 1984.

**Value of manufacturing shipments withheld by the Bureau of the Census to avoid disclosing data for individual companies. In 1987 there were 40 manufacturing establishments in La Plata County. Six of these had 20 or more employees. According to the 1982 Census of Manufactures the manufacturing share of the La Plata County economy was 5.7 percent.

Multipliers for La Plata County

As with most small towns in the United States, Durango (and La Plata County) remains primarily an import-export economy. The area exports world-renowned tourism (skiing vacations, Mesa Verde National Park visits, the Durango and Silverton Narrow-Gauge Railroad train excursions, spectacular high mountain trout fishing and back packing, etc.), some of the best higher education in the state, oil and gas resources, some manufactured goods and some agricultural products. On the other hand, the area imports mos t of its consumer and producer goods, including most of its food and all of its consumer durable goods.

Regional multipliers, the number which if multiplied by new spending on final goods gives the additional output and hence income created, average 1.45 for this area. The multiplier for the United States as a whole approaches 2.45. A multiplier of 1.45 for the Durango area is not atypical for small open economies in rural areas of the United States.

Source: La Plata County Business Opportunities 1995
Sponsored by Durango Industrial Development Foundation
Research - Fort Lewis College Office of Business Analysis