The Evans Chamber hosted a table at the 2016 Economic Forecast today at The Ranch, presented by Biz West. Several of our board members were able to attend as well as Gary Cyr of the Greeley/Weld Airport, Paul Edens from First Farm Bank and Deborah Davidson, the new Marketing and Leasing Manager of the Greeley Mall. It was an interesting mix of speakers and panelists from Northern Colorado. Addressing a full house, they were universally upbeat regarding the economic future of this area in 2016.
Dr. Rich Wobbekind, University of Colorado Executive Director – Business Research Division, Senior Associate Dean for Academic Programs, Associate Dean at Leeds School of Business, did his best to convey a feeling of optimism for the strength of the US economy as well as Northern Colorado. This country is strong compared to the rest of the world as it has fallen to us to drive the world economy. There is strong employment and there will be a shortage of talent as Baby Boomers retire and open up new jobs. Income growth is forecast to be 2%. Interest rates are historically low and the debt burden is also low. Consumer confidence is on the rise. The service sector is booming while the industrial sector contracts due to the strength of the dollar which affects imports.
Overall Colorado home prices rose 12% last year but interest rates will go up. Inflation is modest, .5 – 1% a year. The population increase in the state has been dramatic as has job growth in all sectors except energy. Fort Collins and Greeley have had the highest employment growth in the state.
Wobbekind expects agriculture to have a difficult year as commodity prices are down. He also said that, contrary to popular belief, oil is low due to an oversupply, not weak demand and that a shakeout is coming. Retail sales in Colorado are strong (marijuana is only a very small part of that). This area had a shorter recovery period from the recession than the rest of the state or the country. Average wages here are below the rest of the Front Range but that will change in 2016. Real GDP is above average. Colorado has the highest number of college educated residents, second only to Massachusetts.
Roland Lyon, Vice President of Strategy, Market Expansion and Network Operations for Kaiser Permanente-Colorado was the featured speaker on health care. He stated that the consumers are deciding how to spend their health care dollars. The government role in health care is expanding and is now half of the welfare economy. Doctors are choosing group practice or are employed by hospitals in larger numbers now. The public is demanding more convenient health care, such as clinics in supermarkets. The amount of dollars going to health care has increased four times more than wages.
Charisse Bowen, Campus Director, Galvanize Fort Collins, gave a brief overview and history of the start up and incubator industry in Northern Colorado. It has come a long way in a short period of time and is a valuable part of the economic upswing in this area. Northern Colorado is a great place to build a business.
Jamie Hardy, Senior Vice President and Manager of Health Care Banking for Guaranty Bank and Trust spoke of the consolidation in the industry while pointing out that small banks still continue to thrive. Loans for family residences are the most common loans followed by commercial real estate.
Jessica Ostermick, Director of Research and Analysis – Colorado Region, CBRE, and Kyle Lundy, Vice President, Senior Advisor, CBRE – Northern Colorado supplied the overview of the real estate industry in
the region. The office market is healthy and diversified with the majority of space going to agribusiness, health care and technology.
Due to the energy slow down, office space in downtown Denver is losing value, as it is in other energy-dependent cities.
The growth along I-25 is not slowing. All the cities will blend together. At a 3% rate of growth the area will be home to over one million people in 15 years. New residents are coming for jobs, family and life-style, in that order. Millennials want public transportation, for which there are no funds and no infrastructure in the works. Lundy also had a warning: the economy usually runs in cycles of seven to nine years. We are in the seventh year of a recovery; change is coming.