26th Annual Economic Forecast Event Recap
Experts at Economic Forecast Event predict slowing, but still expanding economy in 2019.
A Vectra Bank Colorado's 26th Annual Economic Forecast event, economic experts Patricia Silverstein, chief economist for the Metro Denver Economic Development Corporation and president of Development Research Partners, and Alex Chausovsky, Director of Speaking Services for ITR Economics , discussed Denver and Colorado growth, doing business in an ever-changing political climate, preparing for slower growth, and how to navigate business in 2019.
"We are in the midst of the longest economic expansion in U.S. history," said Silverstein. "We are 116 months into this expansion, and all indications show we will make it through this expansion at least through June."
Both consumers and businesses have been impacted by this economic expansion, and now is the time to shift thinking to what it means for Coloradans when this expansion slows. There are many factors that will affect the transition of the economy in Colorado, including slowing population growth, increasing housing prices, maintaining employment, diversifying business sectors, investing in infrastructure, and an aging population.
Colorado is the seventh fastest growing state in terms of population, with a 14 percent increase among those who are prime working ages, but there's also an anticipated 61 percent growth in those ages 65 and over.
As Colorado moves into 2019, the correlation between housing prices and wages will be a continuing challenge. Since 2011, consumer prices and wages have both increased by 2.7 percent, but housing prices have increased by 8.5 percent in the metro Denver area. In Boulder, rates are anticipated to increase by another 6 percent in 2019, making it the seventh most expensive area in the country.
When looking at businesses, Silverstein notes that labor will continue to be a challenge. An additional 50,000 new jobs are anticipated in Colorado in 2019, with 31,000 in the metro Denver area. Approximately 26 percent of Colorado's employment base is with business owners. With more than 60,000 registered proprietors, Colorado is one of the largest proprietor employments in the country.
"For businesses retention, it's important to have not only a growth plan but also a plan for if things slow down more than expected," said Silverstein. "In your own business, know what your own indicators are so you can shift and adjust as needed."
Even at a slower growth rate, Colorado continues to outpace the rest of the country, with areas like Greeley, Weld County, Fort Collins, Colorado Springs and Grand Junction surpassing the U.S. job growth rate of 1.6 percent. The business sectors that are contributing to this growth include everything from technology in Fort Collins, to oil and gas and other natural resources in Greeley, and a healthy aerospace industry in Colorado Springs. While Grand Junction is seeing growth, Pueblo has not quite returned to pre-recession growth.
Chausovsky focused on the national economic climate and how that impacts Colorado, echoing Silverstein's thoughts on the economic expansion.
Based on indicators, the 2019 economy will see slower growth this year. The beginning of 2020 will show some slow down into 2021. He does not expect it to be long or steep, but a "chance to take a breath." The major factor in how quickly this expansion slows will be determined on uncertainties of trade and tariffs. However, the next two to three years show that business conditions will remain favorable for growth.
"We are expecting a cyclical peak, that is going to top out mid-year," said Chausovsky. "The economy today is nearly 10 percent larger than at its peak before the great recession 10 years ago."
Chausovsky reiterated that even with slower growth, there are plenty of opportunities for businesses to be strategic and think about what they can do to succeed in a slower economy.
"The winners in this economic transition will be those clients who become students of the economy," said Bruce Alexander, president and CEO of Vectra Bank Colorado. "The information presented today allows businesses to focus on their own business indicators and differentiators to overcome a slow growth period effectively, learning how to take advantage of economic expansion first, while preparing for an economic retraction later."
Another important driver of our environment is the partnership of private, public and nonprofit organizations. As part of the annual conference, in lieu of gifts Vectra will make a $5,000 donation to the Denver Zoo , which is also a new client of Vectra Bank.
This year, more than 550 of Denver business leaders attended the invite-only economic forecast update, while more than 150 people watched the conference online through a live webcast. Speaker presentations, a full video of the event and individual speaker interviews can be found here.