Three experts are forecasting accelerated growth for Colorado's and the nation's economy in 2013.
At Vectra Bank Colorado's recent 20th annual economic forecast, Mark Snead, president of Denver-based RegionTrack, said that even though 2013 is not expected to be a break out year, Snead expects it to be a transition year toward more organic growth. He said he believes “impediments are diminished and there is fuel in the system” from certain economic unknowns and from steady economic recovery resulting in wage and salary job growth up 1.5 percent, personal income growth up 3.3 percent, and retail sales growth up 4.7 percent in 2012. Sources of “fuel” for the economy in 2013 include the Federal Reserve, he said, which remains highly accommodative, ensuring an environment for economic growth, questions answered around the presidential elections, which reduces uncertainty around federal policy. Snead predicts job growth for 2013 at 2.1 percent, or about a 3 percent increase from 2012.
Patricia Silverstein, president of Development Research Partners in Denver, said the Colorado economic recovery is leading the country slightly and more than 20 percent of Colorado businesses are planning on adding employees. Challenges remain though with global economic unease, uncomfortable levels of unemployment and businesses desire for clarity around taxes, healthcare and government spending, she said, adding that these issues should keep the economic recovery long and slow.
Industry bright spots for business, especially for Colorado in terms of employment, are in the professional and business services sectors. While manufacturing jobs are expected to stay low, for Colorado education and healthcare services are growing industries, along with government, wholesale and retail trade. Personal income numbers are nearly returned to pre-recession levels and even with uncertainty people are spending again, with retail trade sales revenue growth up.
From an investor perspective, George Feiger, CEO of Colorado-based Contango Capital Advisors, jokingly dubbed the United States “the least bad place” and he sees the largest impediment to the U.S. economic recovery to be debt. Personal, government and business debt is larger than ever before in history, he said. Also historically, when the country finds itself with this much debt, the crisis has historically been solved through an inflation increase of upwards of 5 percent, he said. Feiger said people should expect structured reforms and inflation going up over the next few years. With advancements in technology, Feiger sees continued decreased employment in manufacturing and that the professional services sector will achieve the most wealth in the future. The shift in wages and education - those with master's degrees will be favored - will widen the income gap even more in this country, Feiger said.
Dr. Fred Crowley of Colorado Springs said Teller County experienced a high population growth since 1990 at 86.3 percent. Most of that growth was in place by 2000 with the county growing only 10.9 percent in the last 10 years. El Paso County is growing to the tune of 62.5 percent since 1990, with Pueblo County growing at about half that rate at 31.8 percent, he said. While population has continued to grow, permits for single-family homes dove in 2008, which greatly increased the new home permit value, he said, noting that mortgage rates are historically low and creating momentum in home sales. Labor force, population and employment have trended up fairly equally in Pueblo and El Paso Counties since 1990, while Teller County saw a spike in population in the late 1990s and flat employment numbers since 2000, Crowley said. El Paso County is the strongest county in manufacturing jobs, but manufacturing has been steadily decreasing in all three counties. Crowley's bottom-line forecast for these counties is that manufacturing needs to increase for these areas to grow their population bases and continue growing the economy.
Boulder fared better and improved faster than the rest of the state and the rest of the country since the recession, recovering almost all of its lost jobs by 2011, according to Dr. Phyllis Resnick. A full recovery of jobs is predicted by 2014, she said. Wage and salary data suggests Boulder County has come all the way back to before the Great Recession in wages, Resnick said, still noting that unemployment per job opening remains high, with education levels of applicants a factor. Comparing it to the last period of structural change after World War I, with the era of highways, malls and suburbanization, Resnick predicted that today's information highway and the evolution of the Internet will structurally change the way we work and live. While job openings are increasing, many of the potential employees for the positions lack the advanced technological education necessary to do the job, she said. Even in manufacturing, equipment so computerized, the average worker no longer has the skills to do the job. Proof of this prediction comes in the job opening rate. The last time the job opening rate was at 2.8 percent, unemployment was at 5 percent. Today, at the same rate, unemployment remains close to 7.8 percent. This structural evolution will lengthen and slow economic recovery while the country adapts and transitions to these changes, according to Resnick.