Forecast for Colorado: growth ahead
While Colorado likely will lag behind the nation in economic recovery, speakers at an annual economic forecast breakfast said they expect modest growth.
Still, a number of factors could slow that growth, including continued high unemployment rates.
Vectra Bank Colorado hosted the event in Denver, which featured Mark Snead, a vice president and executive with the Denver branch of the Federal Reserve Bank of Kansas City; Richard Long, an investment strategy manager with Contango Capital Advisors; and Patricia Silverstein, president of Development Research Partners.
Snead said he believes the U.S. economic recovery is sustainable given growth in income gross domestic product, private-sector hiring and savings levels.
Colorado is no longer in recession and has added jobs over the past six months, Snead said. Still, the state continues to lag behind other areas of the nation in terms of recovery.
Snead said several factors could complicate recovery in Colorado, including a weak real estate market and rising interest rates and commodity prices.
Long said U.S. growth has continued through real estate and debt problems. But it’s taking longer for employment levels to rebound. “We’re currently at 40 months since the downturn began and we’re nowhere near the level of jobs we had in 2007,” he said.
Consumer debt and budget problems at the state and local levels also could slow growth, Long said.
“The tipping point for the federal budget is near,” he added.
Silverstein said she’s also concerned about unemployment levels in Colorado. “Too many people have been unemployed for too long,” she said. “With minimal job opportunities and the government’s budget woes, these conditions are slowing down the traffic of our state’s economy.”
Over the last decade, the Colorado work force grew by 421,000, but only 30,000 jobs were created, Silverstein said. Of the remaining 391,000 people, 200,000 are unemployed and the rest started their own businesses, she added.
Business proprietors comprise more than 25 percent of total employment in Colorado, she said, higher than the national average of just over 21 percent.
Still, Silverstein forecast gains in retail trade and home sales as well as a decline in property foreclosures.
The commercial real estate market likely has hit bottom, she said, as developers and businesses regain confidence.