2004 Colorado Economic Forecast
Rich Wobbekind
CU-Boulder Leeds School of Business

Overall Forecast

“The general tenor of the outlook is very positive this year.  Good job growth, two percent job growth statewide, which is going to amount to up in the 43-45,000 job range. (:13) And what is probably the most positive part of the overall forecast is that all sectors will be showing some job growth. (:22) As we go into 2005, it looks like all of the sectors will be much more positive.”

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Hottest Job Growth Sectors

“ The hottest job growth areas this year has been in the professional and business services areas, it includes things like lawyers, architects, but also software programmers and other types of support areas that are in professional business services, and that has seen a lot of job growth in 2004 and will continue to have strong job growth in 2005 estimating upwards of 15,000 new jobs in that area.”

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High-Tech Jobs

 “The professional and business category -- a lot of those jobs are high-tech jobs and that’s what we are really starting to see is the support for the high-tech industry and, directly, high-tech jobs being created. (:13) And we certainly see some parts of high-tech areas related to defense -- aerospace, homeland security -- those parts are doing quite well in the state. (:22) But we have lagged a little bit in the recovery of the services that support business investment.  Some of the major companies in the state have global services divisions and they have lagged a little bit, but finally they are coming along.”

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Residential Construction

“So, when we look at the picture for 2005, we think the residential market will be quit flat.  We think there is adequate housing for the existing population and we don’t expect any expansion of permits.  We expect permit growth to be flat for 2005.”

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Overall Construction Job Outlook

 “The overall value of construction rises but not enough to generate very many jobs and so we see construction having a very slow job growth.”

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Agriculture

“Agriculture has had some very strong price increasing in the past year.  A lot of agricultural products have had high prices and even with lower quantities of production, cattle, and in some other areas, the agricultural community had done well in terms of total dollars of revenue because of high unit prices. (:23) And we see that occurring again in 2005.  We see strong agricultural prices keeping the agricultural community in better shape. (:32) But agriculture in general seems to be doing much better than say two or three years ago and hopefully is on a path to some stability.”

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Cattle Industry

“With the lifting of some of the trade restrictions with the mad cow disease we think that there will be more export of cattle in the year ahead and so we really think that the cattle industry, in particular, is poised to have another really good year.”

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Mining, Oil and Gas Industries

“The mining industry is one of the sectors that has added jobs over the entire… since 2000 and has been a sector that has really been one of the steady positives in the economy during the economic downturn and slow times, (:14) and that’s related, of course, to the higher energy prices and that continues as more exploration in the state, there’s more wells being drilled, there’s more coal bed methane being drawn and so on.  And so, at least for a short term, that’s a positive.”

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Tourism Industry

“Probably the most optimistic indicator of tourism relates to winter tourism.  Last year we had an increase in out of state skiers.  After having seen several years of a decline of out of state skiers, we started to see more destination skiers coming back in.  That’s extremely important because they stay when they come and they spend money in motels and lodging, which is good for the broader tourism economy. (:25)  Probably the most negative, single statistic relates to park visits, which are down fairly substantially nationally.  National and state park visits are down, particularly national park visits are down.  And so there is some concern that kind of correlates with less car traffic, less camping and fewer people coming to the state in general. (:45) In terms of bright spots, DIA is on a very strong trend this year and is very likely to have record setting passengers pass through DIA, boarding and arriving, (1:02) and next year we think will be an even higher number.  It’s had some of the strongest growth since 9/11 in the country.  And that is a very positive thing for tourism and for business in general.”

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Grand Junction Area

“That area didn’t feel the downturn anywhere near severely as the rest of the state and continues to stay relatively strong. (:19) There are pockets on the western slope, not just Grand Junction and Mesa County, but there are other pockets that have become increasingly popular areas for retirement and second homes. (:21) And so we have started to see a lot of construction, that second home construction, and retirement construction, and that has gotten those areas up to the size mass or density, not density per square mile, but just overall population within a drawing ring, that allows for more substantive retail.  So, we’ve really seen the evolution of the retail environment out in the Grand Junction area. (:47) And that has led to, I think, to a more balanced economy.  More retail but also a lot more industry development out in that area.”

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Durango & Southwest Colorado

“Durango and La Plata County is holding it’s own.  It certainly suffered some from the tourism downturn and obviously the fires of a couple of years ago. (:07)  Fort Lewis anchors the community in the sense of being kind of a stable entity that has put a lot of money into the economy and has students coming and spending money there on a fairly stable and regular basis; spring and fall at the very least (:25) and you bill that into tourism.  But it is an interesting area in the sense that the university has put up a – Fort Lewis has put up a lot of new buildings over the past decade and as that construction money dwindles a little bit that changes the picture a little bit in that area, the overall economic picture.  (:44) Now, there has been quite a bit of effort and some units are already in place to build winter homes, or second homes, that’s another area that’s seeing a lot of that action.  That keeps the construction industry strong. (1:00) But the questions remain for Durango, La Plata County for Summit County and many of the tourism counties; what are the long term impacts of moving to a second home or resort-types industry that relies less on people coming for a weekend and more on people coming and staying 12 weeks out of the year and not using those facilities the other 40 weeks of the year? (1:26) What are the impacts on your overall tourism picture?”

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Colorado Springs

“The folks who spend a lot of time studying the Colorado Springs area believe the turn around actually occurred in 2003 in the Colorado Springs area. (:08) (some coughing)  They believe that the turn around in the Colorado Springs area occurred in 2003 and has actually been on a slow, upward trend since then. (:23)  It obviously suffers a little bit from, ironically, suffers a little bit from the military presence only in the sense that a lot of the military have gotten drawn out of the area and moved in and out of the Middle East and that has taken spending power away from the community that has been fairly normal and stable spending in the community on the retail side. (:47) On the industrial side there had been weakness in the state’s manufacturing and Colorado Springs has significant amount of manufacturing in its base and so when there was weakness in the manufacturing sector it certainly was reflected in Colorado Springs. (1:03) But more recently, Intel has announced they are going to be expanding their facility down there and there has been some pick up in activity and they have had quite a few successes in the past several months in recruiting new firms from out of the state to come and relocate there. (1:18) So, they appear to be headed for, in our opinion and the committee’s opinion, for more modest growth in 2005, but on the right track.”

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Pueblo

“It’s developed into itself.  It has health care types of industry down there and it is building a large retirement base.  West Pueblo is turning into a large retirement area at very affordable rates in an attractive area. (:15)  Pueblo has been able to build a second set of industries built around retirement and health support and so on, which, over all, has helped to stabilize the economy. (:24)  It has been historically, as cities go, a very high unemployment area for the state.  And last year had numbers over seven percent, well over seven percent.  This year its unemployment has dropped into the six range and we see that as a positive sign of more economic stability.”

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