Colorado economy Archives - Page 3 of 16 - Colorado-based Business and Economic Research

Colorado Population to Increase by 90,000 in 2014

February 17, 2014June 12, 2014 horvath Leave a comment

The Colorado population increases and decreases are a result of the natural rate of change (births minus deaths) and the change in net migration (people moving in the state minus people moving out of the state).

Over the past two decades the natural change gradually increased from 31,400 in 1991 to a peak of 40,230 in 2006.

Changes resulting from net migration are closely tied to the strength of the economy. For example, there were five years, from 1986 to 1990, when net migration was negative. More people moved out of state than moved into the state to escape a regional recession. During the past two recessions, net migration declined because it was difficult for people to move and net migration remained positive.

The Colorado population will increase by about 90,000 in 2014. The natural rate of change will rise to 37,000. Net migration will increase dramatically to 53,000, the highest level of change since 2001.

Changes in Colorado population — The Colorado population is changing at a faster rate because of increased net migration.

Issues That Will Present Opportunities and Challenges for Colorado in 2014

January 11, 2014June 28, 2014 horvath Leave a comment

The improving global economy will support broad-based growth of the U.S. economy and vice versa. In turn, Colorado will enjoy its strongest job growth in over a decade. Click here to review the CBER forecast and other economic reports. Some of the opportunities and challenges for 2014 are listed below.

Opportunities

Both Global and U.S. Real GDP are projected to increase at rates greater than 2013. Will that translate into a 4th consecutive year of rising job growth for the state?
After the dysfunctional 2013 Colorado legislative session, a threat by counties to secede from the state, and two successful recalls, are legislators ready to work together for the good of the state?
How much will the passage of Amendment 64 benefit the state fiscally? Will tax revenues exceed enforcement, social, and opportunity costs?
Primary jobs are essential to the economy because they create wealth and usually pay higher than average wages. Will 2014 be the year that there is a stronger increase in primary jobs?
Will Colorado’s strategy to attract millenials prove to be an effective economic development strategy?

Challenges

Are global financial sectors in the mature economies stable? Are financial bubbles looming on the horizon?
Will U.S. monetary policy be conducive to growth of the global economy? Will Janet Yellen be able to unwind Quantitative Easing without drastically raising inflation or the causing a downturn in the equity markets?
Is U.S. public and personal public debt excessive? Will Americans manage their finances more responsibly?
Will the off-year elections bring about more conflict, change, or more of the same?
Will gun-control legislation, anti-fracking efforts, energy legislation that hurt rural Colorado, and other anti-business activity create the impression that Colorado is not business-friendly?
What does Mother Nature have in store for Colorado in 2014?
Will 2014 be the year Colorado begins adding establishments at a significant level?

The most critical item on the list of opportunities and challenges…Will Peyton Manning bring a Super Bowl to Denver in 2014? Go Broncos!

cber.co Colorado Economic Forecast for 2014 – 68,000 to 74,000 Jobs to be Added

January 8, 2014July 6, 2014 horvath Leave a comment

In 2013 the state experienced natural disasters and self-inflicted political wounds, yet Colorado employment grew at a faster than expected rate. The cber.co economic forecast points to continued expansion for 2014.

On a Positive Note…

The state population grew at a higher rate than expected in 2013. Stronger growth is on tap for 2014.
The story is the same for employment. In 2013, the state added approximately 68,000 workers and will add another 68,000 to 74,000 in 2014. This represents job growth in the rage of 2.9% to 3.1%.
Unemployment will continue to decline, and will be in the range of 5.5% to 5.8% at the end of 2014.
In 2013 consumers were delighted that gasoline prices declined. At the moment there is no reason to believe they will rise precipitously (knock on wood).
Colorado new car registrations have risen steadily for the period 2010 to 2013. A decline is unlikely in 2014.
Colorado’s general fund, particularly sales and income taxes, has been a benefactor of increased population, employment, and wages. Likewise the revenue for city and county governments has improved.

Some Mixed News…

Per Capita Personal Income will increase by 3.7% in 2014. This is slightly less than the rate of growth for the U.S. Over the past two decades the gap between the U.S. PCPI and the state PCPI has closed significantly.
In 2014, Colorado inflation will be 3.0%, well above the rate for the U.S.
In Colorado, housing prices have increased at a faster rate than the nation. That is great news for home owners, but not so good news for people wanting to enter the housing market.
The Construction Sector is slowly improving. Increased building activity supports growth in multiple sectors and causes greater congestion on the highways. For some, the latter is not desirable.
Although the state returned to 2008 peak employment, it will be a long time before the state returns to the 2007 peak number of establishments.

Looking ahead, the economy will build on the foundation established in 2013. Hopefully the state’s leadership will be less dysfunctional.

Click here to review the cber.co forecast and other economic reports.

cber.co forecast

Jobs and Output Data Point to Stronger Growth for Colorado

December 20, 2013December 20, 2013 horvath Leave a comment

Earlier today, the Bureau of Labor Statistics released November jobs data for Colorado. As measured by increased jobs and decreased unemployment, the update showed the improvement in the economy is geographically broad-based. Most states are enjoying the recovery!

Specifically the highlights from the jobs data are:

Wage and salary employment increased in 43 states and decreased in 7 states and the District of Columbia.
Decreased unemployment rates were recorded in 42 states and the District of Columbia compared to a year ago, 1 state was flat and 7 states were higher. Nationally, November unemployment registered 7.0%, down 0.8 percentage points from a year ago.
In Colorado the November unemployment rate was down 1.1 percentage points from the same time last year (7.6% compared to 6.5%).

A stronger national economy bodes well for Colorado.

Earlier in the month the Bureau of Labor Statistics indicated its projection models had understated the rate of job growth in the state in 2013. Latest estimates project the state will actually add 60,000 to 65,000 jobs this year.

More good news came today when the Bureau of Economic Analysis revised Q3 GDP upward to 4.1%. Exports and business and consumer spending were stronger than anticipated.

The stronger jobs and output data suggest the impacts of sequestration, the partial government shutdown, and the fallout from the earlier budget and debt ceiling debates may have had less of a net impact than originally thought.

For the first time in 6 or 7 years, Colorado and the U.S. will be entering a new year with a solid foundation for growth. If that foundation remains in place, there is reason to believe that Colorado will add at least 65,000 jobs in 2014.

Leeds Economic Forecast Points to Slower Growth in Year Ahead – AGAIN

December 12, 2013December 12, 2013 horvath Leave a comment

On December 8th Professor Richard Wobbekind and the Leeds School of Business (SOB) released the 49th annual economic forecast for Colorado. Unfortunately, the fundamentals of the 2014 outlook were as questionable as the 2012 and 2013 forecasts.

For three consecutive years (2012 to 2014) the SOB has projected fewer jobs would be added in the coming year, even though Real GDP was predicted to increase significantly in two of those three years.

A summary of the SOB forecasts from 2012 to 2014 are provided in the table below.

Leeds School of Business Forecast – US Real GDP and Colorado Employment
Year	Change in Real GDP	Change in State Employment
2012	In 2012 Real GDP will show a significant increase in the rate of growth for 2011	Fewer jobs will be added in the coming year
2013	In 2013 Real GDP will growth at about the same rate as 2012, a slight decrease is possible	Fewer jobs will be added in the coming year
2014	In 2014 Real GDP will increase at a rate almost double the 2013 rate	Fewer jobs will be added in the coming year

Source: SOB BEOF publications

The actual data for 2012 and preliminary data for 2013 are provided in the table below.

Performance of the Economy – US Real GDP and Colorado Employment
Year	Change in Real GDP	Change in State Employment
2012	The rate of growth of 2012 was significantly greater than the rate of growth for 2011	More jobs were added in 2012 than 2011
2013	The 2013 preliminary rate of growth was significantly lower than the rate of growth for 2012.	More jobs were added in 2013 than 2012
2014	To be determined	To be determined

Source: BLS, BEA, CBER

A historical look at the recoveries from the last three recessions is instructive.

After the 1991 recession, Colorado added jobs at an increasing rate for three years (1992 to 1994). This recovery was exceptionally strong. Job growth in 1994 was second highest in state history.

Following the 2001 recession, Colorado “added” jobs at an increasing rate for four years (2003 to 2006). That rate of recovery for that period was anemic, but improving. Continued job growth at an increasing rate was cut short by the 2007 recession.
After the 2007 recession, Colorado has “added” jobs at an increasing rate for four years (2010 to current). The rate of recovery has been so-so. In other words, there is a strong likelihood that job growth will continue at an increasing rate in 2014.

The saying “Every blind squirrel finds an acorn now and then” can be applied to the 2012-2014 SOB forecasts. If they continue to predict the state will add fewer jobs next year than this year, at some point they will be correct. Will 2014 finally be the year they are right?

We can only hope the SOB is wrong again!

Colorado Jobs Data for October – Mixed Message

November 24, 2013November 24, 2013 horvath Leave a comment

The recent BLS jobs report for Colorado had mixed news.

The good news is that Colorado will see solid job growth this year. The bad news is that jobs are being added at a slower rate than earlier in the year.

On the street, most Colorado business owners are not pleased with government leadership, but they are generally upbeat about the economy.

The unemployment rate was flat from February through August. The slight declines in September and October are a sign that the rate continues to slowly move downward. BLS reports the state rate is lower than the rate for the U.S.; however, it is not statistically different than the U.S. (The latest state rate is 6.8% compared to 7.3% for the U.S.)

On a positive note, the number of unemployed workers has fallen to 185,500. This is the lowest number of unemployed since February 2009; however, it is more than twice the pre-recession number.

The wage and salary data is mostly positive. The average number of jobs added for the first 10 months of 2013 is about 56,400 greater than the same period last year. Unfortunately, jobs have been added at a declining rate since March.

Colorado is on track to add about 55,000 jobs for 2013, an increase of 2.3%. The question is, “Given this downward trend in the number of jobs being added, what lies ahead for 2014?”

All jobs are important; however, there is concern there are too few jobs being added that “create” other jobs or bring in wealth from the outside. The lack of a sufficient number of new primary jobs may be the reason for the decreasing rate of growth. State and local economic developers are working hard to address this issue.

It is unlikely the state numbers were noticeably impacted by the September flooding and the limited Government shutdown. The flooding clearly had a negative impact on the local economies and the limited government shutdown may have caused inconvenience for cities and companies that are heavily dependent on federal funding. These events will likely have a greater impact on overall output than employment.

For the most part, the latest jobs report bodes well for the state.

Manufacturing is Critical to Colorado

October 19, 2013October 19, 2013 horvath Leave a comment

Manufacturing is important to the Colorado economy for a variety of reasons.

From a data perspective, manufacturing is important for the following reasons:

131,989 workers are employed in the sector. This is 5.8% of total employment and 7.0% of all private sector jobs.
There are 5,280 manufacturing establishments. This is 3.1% of all firms, public and private.
Total annual wages are $8.2 billion, or 7.2% of total wages and 8.5% of the private sector total.
Average annual wages are $62,237. This is 123.1% of the state average and 122.2% of the private sector average.

The source is the 2012 QCEW data series produced by BLS.

Government Sector is Top in Output and Jobs for Colorado

October 7, 2013October 7, 2013 horvath Leave a comment

All industries are important to the economy for different reasons! Some may generate tax revenue for governments, they may create jobs, or they might pay higher than average wages. Others may be lifestyle industries or they may be strong producers of output. By comprehending how industries contribute to the economy, it is possible to better understand how they relate to each other and how they cause an economy to expand or contract.

There are distinct differences between the top 10 Colorado sectors for output and employment. Government tops both lists. The sectors in green are common to both lists and are particularly important to the Colorado economy.

It is imperative to have public and private leaders who understand that industries are important to the economy for different reasons. They must recognize that some industries create jobs, others generate output, and some produce both. In Colorado, the following sectors most effectively produce both: Health care; Retail trade; Professional, scientific, and technical; Manufacturing; and Finance and insurance.

2012 Colorado GDP	2012 CES Employment
1. Government	1. Government
2. Real estate and rental and leasing	2. Health care and social assistance
3. Professional, scient., and tech..	3. Accommodations and food services
4. Information	4. Retail trade
5. Manufacturing	5. Professional, scient., and tech.
6. Finance and insurance	6. Administrative and waste management
7. Health care and social assistance	7. Manufacturing
8. Retail trade	8. Construction
9. Wholesale trade	9. Finance and insurance
10. Mining	10. Other services

Source: BLS and BEA.

The top 10 output sectors account for 77.7% of total GDP and the top 10 job sectors account for 81.9% of total employment.

For additional analysis of Colorado employment and output go to the cber.co website.

Colorado Legislative Council and OSPB Optimistic About 2014

October 1, 2013October 1, 2013 horvath Leave a comment

On September 20th, both the Colorado Legislative Council (CLC) and the Governor’s Office of State Planning and Budgeting (OSPB) released their quarterly economic updates. Their preliminary look at 2014 is positive.

Highlights from the CLC outlook for 2014 are:
• The unemployment rate will drop to 6.9%.
• 55,400 wage and salary jobs will be added.
• Retail trade sales will increase by 5.4%.
• 35,400 home building permits will be issued.
• Inflation will increase by 3.2%.
In summary, CLC feels the state will continue to add jobs at a similar rate to 2013, but unemployment will not decline substantially. Retail trade sales will show strong growth and there will be a modest increase in home building permits. Inflation may become an issue.

Highlights from the OSPB outlook for 2014 are:
• The unemployment rate will decline to 6.5%.
• 57,500 wage and salary jobs will be added.
• Retail trade sales will increase by 5.4%.
• 37,300 home building permits will be issued.
• Inflation will increase by 2.4%.
Job growth will be similar to 2013, which will lead to a slight decline in unemployment. Retail trade sales will show strong growth and the housing market will post modest gains. Inflation will remain in check.

For more details, check out the CLC quarterly report and the OSPB report by clicking here. Both groups produce comprehensive economic updates on a quarterly basis. They are “must read” material for anyone interested in the state economy. The reports are released around the 20th of the month in March, June, September, and December.

Despite Solid Job Growth the Number of Unemployed has Dropped Very Little in 2013

September 25, 2013September 25, 2013 horvath Leave a comment

This year Colorado is expected to add over 55,000 wage and salary workers, an increase of about 2.5%. This equates to about 4,600 jobs each month.

But there is a downside.

Between January and March of this year the unemployment rate dropped slightly from 7.3% to 7.1%. Since then the rate has moved within the range of 6.9% and 7.1% (see blue line in chart below). These changes are not statistically significant.

The unemployment rate has been stagnant because there has not been a significant change in the size of the labor force or the number of unemployed.

In August, there were 194,068 unemployed workers in Colorado (see red line in chart below). As a point of reference, the lowest number of unemployed prior to the recession was 93,736 in April 2007 and the peak was 245,928 in October 2010.

The number of unemployed workers declined by 6,628 between January and August; however, there was a drop of only 1,561 between March and August. In August 2013 the number of unemployed was 194,068.

Some high tech industries are struggling to find qualified workers, particularly in specialized positions. On the other hand, the unemployment rate in other industries remains in double digits. The problem is exacerbated by the fact that a portion of the sidelined workers do not have the skills or education to fill positions in industries with low unemployment rates.

Clearly, the recovery from the Great Recession created a dysfunctional economy.