27th Annual Economic Forecast Recap
Experts at Economic Forecast Event discuss what to expect for the economy in 2020.
At Vectra Bank's 27th Annual Economic Forecast event, economic experts Patricia Silverstein, President of Development Research Partners , and Ryan Detrick, Senior Market Strategist at LPL Financial , addressed topics such as trade risk, slower global growth, consumer spending, and the status of corporate America at both the state and national level.
The theme of the event was Hindsight 2020, looking back on the past year and the coming years ahead. Vectra President and CEO Bruce Alexander stated that "while we cannot see directly into the future, one thing we can predict is that uncertainty in the markets is here to stay."
J.J. Ament, CEO of the Metro Denver Economic Development Corporation , implored attendees to remain active and engaged in the metro Denver area, as a strong economy depends on the contributions of the community.
"We are in the midst of the longest economic expansion in modern U.S. history," said Silverstein. "We are now at 126 months."
Silverstein shared that there are a few clear indicators of where the Colorado economy is headed in 2020 - interest rates remain stable, wages are rising, and the construction market is active, while workers remain difficult to find. Not so clear is how tariffs and trade war, geopolitical risk, an uncertain future in oil and gas, and an anti-growth initiative will impact Colorado.
While job growth in Colorado has slowed over the past few years to a 1.5 percent annual increase, it is still the tenth fastest growing state. The largest areas of growth can be seen due to technology and software industries in Boulder, oil and gas and renewable energies in Greeley and Weld County, technology in Fort Collins, cybersecurity in Colorado Springs, and retiree attraction in Grand Junction.
Finding labor has been a challenge for businesses for a while now, and will continue into 2020. The unemployment rate is still very low, and Silverstein encourages businesses to hang on to the good workers that they have. Colorado has the second largest increase in average wages in the latter half of last year at a 4.9 percent increase, which should help retain labor.
Commercial real estate vacancy rates are decreasing in Metro Denver while construction increases, and consumers continue to spend at a healthy pace, both good signs for the economy. The biggest challenge is still the expensive housing market, with Boulder being the 7th most expensive in the country, and metro Denver at the 11th most expensive. However, appreciation rates are starting to slow. While this may not sound like good news for home owners, it is very good news for home affordability over all. It seems Colorado has finally "caught up" in terms of new construction vs. demand for homes.
Ryan Detrick focused on the economy and market trends on a national level.
Detrick pointed out that in the past, the U.S. has experienced a recession every few years or so. That may seem like bad news considering we are now in 11 years of economic growth, but that's not necessarily the case. The U.S. is now a more developed country, and developed countries throughout Europe often see growth for 15+ years. In fact, there has not been a recession in Australia in 28 years.
Detrick also emphasized that politics have a lot to do with the economy, trade uncertainty, election years, fiscal policy, and the makeup of Congress all have an effect on the market and economy. We can learn a lot by looking at historical data on the economy during different political climates.
While business spending has decreased in recent years, consumer spending is up, and since consumers make up the majority of the GDP this is good news. Emerging markets are also getting stronger, which is good. 90 percent of the world's population under 30 years of age live in an emerging market.
Planning is everything — Detrick said that a strong economy can weather a lot of uncertainty, but planning ahead will never hurt. Investing isn't easy, it's a rollercoaster, and you have to earn the improvements. But riding out the cycles and planning tend to work out favorably.
As is tradition at Vectra's Economic Forecast, in the spirit of economic success and partnership between for-profit, non-profit, and government sectors, Vectra was proud to announce a donation to a local non-profit organization. This year's recipient of a $5,000 donation was Von's Vision , which provides eye care for low-income children throughout Denver.
Overall, things look good for a the economy in 2020, and neither of our expert speakers predict a recession.
Speaker presentations, a full video of the event, and individual speaker interviews can be found here.
The views expressed herein may not be the views of Zions Bancorporation, N.A. dba Vectra Bank and, therefore, are submitted as informational purposes only.