Tweet of the Week: Colorado leads nation out of recession

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When do economists predict this good news will happen in the Centennial State? Look below the fold.

In a new monthly Adversity Index compiled by MSNBC.com and Moody’s Economy.com, Colorado should recover by the end of the fourth quarter of 2009. The index measures employment, industrial production, housing starts and house prices to forecast the recovery time lines for states and metro areas.

Why will some states recover faster than others?

High-tech industry is one element. A slowdown in technology spending in 2008 and 2009 has created a pent-up demand for technology — businesses that know they need to upgrade and are waiting for the ability to spend.

“States that have a high concentration in tech-related industries are well positioned to take advantage of this trend, which is particularly true of Colorado, Idaho, Oregon and Washington and to a lesser extent Texas,” said economist Andrew Gledhill of Moody’s Economy.com.

“Although not scheduled to begin its recovery until a quarter later, New Mexico also fits into this category of benefiting from a tech recovery.”

Why is Texas, which has less high-tech industry, on the list for early job growth?

“The state had largely missed out on the housing boom (as did Colorado) and was among the last to join the recession, in large part due to lingering impacts from the energy boom of years past,” Gledhill said. “Similarly, other expected early risers such as Washington and Colorado were also relatively late to join the recession for various reasons. Thus, as conditions begin to turn nationally, they have less of a hole to dig themselves out of.”

Another element for those early risers: better credit ratings.

“One factor that the five early job recovery states all have in common is less erosion in household credit conditions, with the worst of the group being Idaho,” Gledhill said. “As a result, once it seems apparent that recovery is setting in, households in these states will be more able to turn and inject money back into their local economies. There is less de-leveraging of household balance sheets in these states. This will in turn prompt a more favorable trend in certain types of service industries.”

Click the image to access the interactive chart. (Illustration/MSNBC.com)
Click the image to access the interactive chart. (Illustration/MSNBC.com)