Colorado’s broad economic expansion to continue in 2015
Dec. 8, 2014
Richard Wobbekind
With 2014 marking Colorado’s highest employment growth since the start of
the 21st century, the state will continue to expand in 2015, adding a variety of
jobs in almost every business sector, according to economist Richard
Wobbekind of the University of Colorado Boulder’s Leeds School of Business.
Wobbekind’s announcement is part of the 50th annual Colorado Business
Economic Outlook Forum to be presented Dec. 8 by the Leeds School’s
Business Research Division.
The comprehensive outlook report for 2015 features forecasts and trends for
13 business sectors prepared by more than 100 key business, government and
industry professionals.
Richard Wobbekind comments about the jobs outlook for next year and many
other aspects of Colorado’s economy, including what’s in store next year for
various regions in Colorado.
CUT 1 -- Overall Job Outlook
“The outlook remains very positive for Colorado. We’re forecasting over
60,000 new jobs – about a two-and-a-half percent job growth -- and once
again across a broad array of industries. (:11) Looking at the numbers directly,
however, some people might be dismayed because we are actually forecasting
a little bit slower job growth than in 2014. (:21) - There are a variety of
reasons for slower job growth in 2015. We are forecasting a slower growth
rate in the energy sector in terms of new job growth. (:30) But actually labor
shortages and other things are really bringing down job growth forecast for
most of the sector. (55) It’s still positive, but just at a smaller number.” (:39)
CUT 2 -- Strongest Sectors
“In terms of job growth for this year the strongest area is going to
professional and business services. That includes the scientific and technical
jobs – R and D – and that continues to be very robust job growth in 2014
and in 2015. (:15) We also foresee another strong year for leisure and
hospitality – actually an even stronger growth year then 2014. We’re seeing
very good signs in that industry – higher occupancy rates, newer hotels
coming on line. (:31) In terms of the third largest growth for the coming year
is education and health. And this is private education and private health
delivery. And almost all of the job growth is in the health side of the ledger.
(:43)
CUT 3 -- Weakest Sectors
“The weakest area for 2014 job growth -- information is at zero. So not
negative. It’s been negative for the last 14 years in a row. But this is an area
that has huge consolidation going on. It includes printing and publishing,
broadcast media. (:19) We’re seeing just tremendous consolidation even with
the growth and output in that area. So that part has really suffered quite a bit.
(:27) And surprisingly, maybe to many, the next smallest area of growth is in
natural resources and mining. And that’s, of course, the area that has oil and
gas and coal. (:39) And the number percentage-wise is a reasonably large
percentage. But that sector just does not have very many employees in it. So
that winds up being just a little over 2,000 new jobs.” (:50)
CUT 4 – Positive Impact of Falling Oil Prices
“The falling price of oil is a real benefit to consumers. There are various
estimates out there from different financial firms and so on that indicate that
this is somewhere in the neighborhood of $75 to $80 billion dollar tax cut for
the American consumer. (:15) And that’s a huge amount of money in terms of
additional consumption. So it’s going to enable people to afford more things
than they can afford now and that’s a very strong positive. (:26)
CUT 5 – Negative Impact of Falling Oil Prices
“On the negative side you will start to see impacts down the line if we see a
persistence of prices below $70 per barrel. We do anticipate that this will
create some slow down in new exploration and certainly some slow down in
production in different parts of the country. (:20) Our forecast that our energy
group did has the price range being above $70 – a wide range – but above
$70 once the industry stabilizes. So net – good for the consumer, bad for the
energy industry.” (:35)
CUT 6 – Energy Sector
“Overall the weaknesses in energy prices are going to bring down the total
value in production in that sector. Some of the areas are also suffering from
reduced demand like coal. (:12) Still we remain in all of those areas a top ten
production state for energy and very strong in terms of our position in wind
power. We are the tenth highest producing now and have the thirteenth
highest potential. (:23 Going forward in the next a couple of years we’ll be
producing a lot more solar with some of the concentrated solar efforts that
are being developed. So we remain a very strong energy state.” (:33)
CUT 7 -- Tourism
“We do think that the lower fuel prices nationally will keep airfares at
somewhat reasonable rates. And the consumer will have more discretionary
income. (1030) Obviously, tourism is more of a discretionary expenditure. So
the committee is very optimistic that going forward over the next year that
we are going to see continued strong growth in the tourism industry -- both
winter and summer.” (:26)
CUT 8 – Construction Sector
“Construction employment really surged in 2013 but we’re still not back to
previous levels. And we are seeing a lot of demand for construction on
everything from rebuilding flood-damaged homes and general construction in
the economy to jobs that are related to the energy industry and the
development of the energy industry. (:23) We’ve had strong growth in the
non-residential area this year and we are projecting extremely strong growth
for 2015 -- everything from new medical facilities to new commercial and
industrial space. So we think that’s going to be a really big pick up and a lot
of that is already in the pipeline.” (:44)
CUT 9 -- High Technology Sector
“Things like cloud computing and software related industries have been very,
very strong. In terms of services we’re seeing pick up in support services for
technology, as well. Sort of the accounting people and the finance people and
all the other support pieces are also part of the employment growth, even
though they are not directly related into the technology firm, they are
indirectly related to the technology firm. (:23) We’re also seeing good growth
on what you would probably put more on the manufacturing side of
technology in terms of aerospace – continues to be a solid sector for the
state.” (:33)
CUT 10 -- Agriculture Sector
“Agriculture has had a good year in terms of profitability – net farm income is
at record-setting levels despite the fact that there have been challenges on
the revenue side and certainly some of that being an impact of the drought.
(:15) For Colorado when you talk agriculture you are starting with the cattle
industry. It’s a major piece of the overall agricultural industry and the
droughts have caused tremendous reduction in the size of the herds. (1609)
On the flip side the prices of beef have gone up so dramatically that that’s
really helped in terms of revenue for the cattle that they are selling.” (:35)
CUT 11 -- Outlook for Denver-Boulder Area
“Denver and Boulder very solid, very strong job growth -- job growth in
excess of 2 1/2 percent, close to 3. Unemployment rates very, very modest.
(:13) And in terms of seeing additional capacity coming on line – meaning
housing capacity and industrial capacity, production capacity – this is the area
that is seeing the majority of the new building that’s going to go on in terms
of the construction industry. (:29) So in many ways you can say it’s extremely
healthy because of it’s diversity and also it’s pace of growth.” (:36)
CUT 12 -- Outlook for Fort Collins Area
“Larimer County continues to have hi tech and obviously the university effect
up there. And has added a lot of service employment up -- health service
employment, retail employment. (:14) It’s really become a major regional hub
for retail. It continues to have population growth. So it’s become kind of a
metropolis in and of its self.” (:26)
CUT 13 – Outlook for Greeley Area
“Greeley, Weld County, is growing very much on the good side of the
equation. And specifically, when we talk about goods, it’s natural resources
and mining. It’s agriculture, it’s manufacturing. Well they have two of those
areas growing at a fairly hefty clip.” (:17)
CUT 14 – Outlook for Grand Junction Area
“Grand Junction has made a lot of efforts to diversity their economy. They
have added over the last several years a significant percentage changes in
things like manufacturing as they’ve experienced a dramatic downturn in
terms of the energy industry in what’s that’s meant. (:18) They’ve really started
to see the comeback of tourism. Their agriculture around that area is strong.
They have the wine industry, which is a combination of agriculture but, also,
has a tourism impact for them. (:32) So they have seen some of those pieces
pick up. They have seen some of their retail pick up. They have certainly
diversified in the manufacturing area. And they finally are starting to see some
stability in home prices, which was a really big deal.” (:48)
CUT 15 – Outlook for Durango Area
“Durango is doing extremely well. Their extractive industry – think of them as
natural gas but they also have some oil so that has kept that part of their
industry relatively strong. And they’ve over the years been successful in
developing a regional health center that has become very productive for them.
(:20) They continue to have the university, Fort Lewis, which brings in close to
4 thousand students a year. Their tourism industry has done very well over
the last year. (:28)They brought in a check payment processing company
called Mercury, which is a significantly big employee. Top that off with
bringing in a Wal Mart – for them it’s a big employee for that area. And that’s
really helped to add a significant amount of employment. Their tourism
industry has done very well over the last year.” (:44)
CUT 16 – Outlook for Pueblo Area
“ Pueblo has been in sort of a … has been one of the slower areas to recover.
It has been sort of in a slow-growth mode and part of that has been driven
by housing prices remaining fairly sluggish. Employment growth also
remaining fairly sluggish – maybe all these things go hand-in-hand. (:19) The
employment growth for Pueblo is up 1 percent this year. That may not sound
great but they have averaged less than 1 percent over the last ten years. (:31)
We are finally starting to see a positive sort of turn around in employment
growth. That’s on the good side. We’re also seeing unemployment rates,
while higher than the state rate, coming down under 6 percent so they are
starting to get a much more solid base there.” (:50)
CUT 17– Outlook for Colorado Springs Area
“They are being, in many ways, very creative in going forward. They are really
trying to develop the entrepreneurial spirit -- something that they had maybe
relied on less on in the past. But they are seeing the importance of the
homegrown business. And they are being very proactive in that area. (:16) Still
year over year their employment is just about flat – slightly negative. So
they’re bouncing along. (:25) A clearly bright spot is tourism. They had a very
nice bounce back in tourism. They didn’t have to deal with fires and floods
like they had in the past. And they are very much considered a place to go
for conferences. (:41) If you spend time down there you’re well aware of that.
It’s a lovely place and they have some great hotel and convention-types of
facilities down there. And that’s one thing that they’ve really picked up on
and they are developing very nicely.” (:55)
-CU-