The Colorado economy should continue to slowly recover in 2012 even as uncertainty over the global economy persists.
Gross domestic product, the broad measure of goods and services produced in the United States, should grow at an annual rate of about 2 percent. Payrolls nationally should increase 1 percent, according to projections at an annual economic forecast breakfast presented by Vectra Bank Colorado.
“With all of the challenges it is facing, the fact that the economy has continued to grow at a fairly steady or modest pace in some sense could be considered very impressive,” said Mark Snead, an economist and executive with the Denver branch of the Federal Reserve Bank of Kansas City.
“While we normally see surges in GDP and employment growth after a recession, considering the obstacles in place for the country, an annual 2 percent growth rate is an average growth rate,” Snead added.
A potential sovereign debt crises and recession in Europe could pose the biggest obstacle to continued recovery in the U.S., Snead said. But the downturn in the real estate market also has been a drag on the economy. He forecasted at least two to three selling cycles before large home inventories are reduced.
Patricia Silverstein, president of Development Research Partners, a Colorado-based real estate analysis and economic development research firm, suggested a “rebuild and remodel” strategy for small businesses. While business owners and managers can hope for more clarity, they must chart their own paths for growth, Silverstein said.
George Feiger, chief executive officer of Contango Capital Advisors based in San Francisco, said business owners as well as individuals should closely monitor global issues as they set short- and long-term investment goals.
In addition to ongoing problems in Europe, Feiger said other issues include slow growth and mounting debt in the U.S., speculative bubbles in emerging markets, inflation and resource suppliers.