Answer: Unfortunately I can't give you a definite answer based on your description. There are a number of possible causes for spruce needles to turn brown and branches to look sparse including cytospora canker, needle casts, spider mites and possibly the spruce aphid. All of these would cause damage without obvious insects or holes. Another possibility is that the tree got too dry at some point during its first year, and needles died back as a result. If possible, I would consult with your local county extension or an arborist for a definite identification of the problem. Glad it's putting out such great new growth!
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