Boulder’s economic horizon will keep its rosy glow, though economists anticipate the pace will slow in the face of growing local and national challenges.
Nationally recognized experts presented a mixed economic message to a record-setting crowd of civic, political and business leaders gathered for the 12th annual Boulder Economic Forecast. Organized by the Boulder Chamber and Boulder Economic Council, the event was held January 17 at the Embassy Suites Hotel. RE/MAX of Boulder is among the event’s sponsors.
The goal is to arm community leaders with up-to-date statistics and trends that inform decisions and support local economic vitality, according to John Tayer, CEO and President of the Boulder Chamber.
And community leaders will want to take heed.
Keynote speaker Dr. Richard Wobbekind, Executive Director CU-Boulder Leeds Business Research Division, shared a vision of continued economic growth but more moderate than previous years.
“Overall the picture is pretty positive in the sense that consumption is growing, investment is growing, government spending has been growing, so you have those pieces pushing the economy forward. That continues to fuel growth and employment,” says Wobbekind.
But uphill pressures are mounting.
With national GDP growth slowing to a projected 2.4-2.5 percent for 2019, the national economy is moving to a moderate trend. Wobbekind says the thing on everyone’s mind – “the elephant in the room”—is whether recent stock market volatility and other factors will lead to a significant downturn in the economy.
“Will the Recovery Ever End?” is his presentation title. But Wobbekind says it’s hard to say whether or not the economy will turn towards recession.
National outlook a mixed bag
Nationally, Wobbekind’s data showed a story of good news, bad news.
On the good news side, Wobbekind says nationally incomes are rising due to strong employment accompanied by strong wages. With rising incomes, consumption rates are growing and debt burden as a percentage of income is relatively low. National FHFA home price growth is showing strong price appreciation.
Then there are the tempered aspects of the national economy. He says consumer confidence is still quite high, historically speaking, but it has come down slightly. Businesses are in good shape, but there is uncertainty about interest rates, trade agreements, sales and profit growth and hiring. Nationally, business confidence is falling, but still above neutral.
Wobbekind also presents some straight-up challenges. Corporate and private tax cuts are effectively ending, with the tax cut stimulus leaving a national deficit of over $1 trillion, accumulated during a prolonged period of economic expansion. Workers are in short supply with low unemployment rates and 6.7 million jobs unfilled nationwide. Student loan debt is high and interest rates may see modest increases.
Colorado’s economy sustaining strength, but pressure is rising
Colorado’s economic record has been strong, outperforming the nation in recent years. For example, the state ranked third in the country for pace of GDP growth in 2017. Wobbekind suggests the trend may keep going, though more slowly.
For one, strong employment growth is expected to continue – Colorado has been in the top five states for job creation since 2008. But in 2018, the employment growth was down slightly to two percent. Even so, Colorado has the third highest labor participation in the country.
But worker’s wage growth is not as strong as would be expected given the tight labor market. Wobbekind notes lackluster increase in wages is troubling in the face of the high cost of housing and inflation.
While Colorado’s population keeps growing, the rate is slowing. Net migration will continue to decline as it did last year.
Home price appreciation—notably among the fastest growing in the U.S for the past 10 years—fell from the top three slots but remains in the top 10. Residential building permit activity is still strong.
While businesses are still confident in state and local economies, confidence is dropping when it comes to the national economy.
Boulder County carries on
Boulder County is expected to mostly hold steady. Though the area’s strong rate of growth is expected to decrease next year, the decline will be slight. Key statistics Wobbekind listed are:
Boulder’s GDP growth is 4 percent
Much needed multifamily housing stock is increasing
City of Boulder’s median single family home prices have stabilized somewhat
City of Boulder has a significant jump in office vacancies and more office space is coming online
Boulder County wage growth is 4.7 percent
Broomfield and Denver have higher wages than Boulder
City of Boulder’s sales and use tax dipped last year but is climbing back up
Wobbekind points to headwinds facing Colorado, saying the state should watch out for:
Drought and weather
Real wage increases
PERA funded only at 46 percent
Labor shortage one of state’s biggest challenges
Skillful Colorado’s Executive Director, Shannon Block, dove into to strategies for overcoming the shortage of skilled workers. Employers are struggling to find workers and the cause of the talent shortage is a skills gap. Fueling the problem, says Block, are traditional employment practices narrowly focused on candidates with 4-year college degrees. That focus is making job-landing difficult for the 70 percent of Americans who don’t have a 4-year degree.
Skillful Colorado’s focus is to shift that trend toward hiring practices that value skills-based talent. The goal is to help Coloradans get jobs in a rapidly changing economy, particularly the 60 percent In Colorado with no college degree.
For more information, see Boulder Economic Forecast slide presentations at:
Dr. Rich Wobbekind’s 2019 Boulder Economic Forecast: https://ecs.page.link/YoZU
Shannon Block, Skillful Colorado, Addressing the Skills Gap: https://ecs.page.link/kLGs
Originally posted by Tom Kalinski Founder RE/MAX of Boulder on Thursday, February 7th, 2019 at 1:40pm.
The highly anticipated Boulder Valley Real Estate Conference will be here soon! It will be held on Thursday, November 15, featuring an outstanding line-up of speakers and panelists who will discuss the latest issues and trends in local real estate from our tech economy, Bitcoin, and development projects along the Front Range to housing policy, housing stock, and insights into commercial real estate. RE/MAX of Boulder is proud to be the presenting sponsor. Our Broker/Owner Jay Kalinski and Realtor Duane Duggan speak with conference organizer Chris Wood from BizWest to give you the details. Click below to see the video.
Transportation and housing go hand in hand as critical components of infrastructure and quality of life. In Boulder, citywide enthusiasm for biking and alternative transportation came into sharp focus on the 42nd annual Bike to Work Day held June 27. Beginning at 6:30 a.m., thousands took to their pedal-powered wheels – or simply their feet – to go from home to work. In strong support, local companies and organizations hosted nearly 50 breakfast stations, keeping Boulder riders and walkers well fueled on their morning commute.
At the corner of Canyon Boulevard and Folsom, commuters were energized at such a station. Sponsored by RE/MAX of Boulder with Embassy Suites Boulder and Hilton Garden Inn, they treated riders to a hydrating Skratch Labs drink, refueling snacks, and giveaways. The station was manned by RE/MAX of Boulder Realtors with deep cycling roots including Art Schwadron along with biking enthusiast Chip Bruss, both of whom rode 150 miles in two days during Colorado’s Bike MS event to support multiple sclerosis research.
It’s only natural that Boulder’s Bike to Work Day is one of the largest nationwide. Presented by the City of Boulder, GO Boulder, Community Cycles, and a long list of corporate sponsors, Boulder Walk and Bike Day has grown into a month-long celebration of walking and biking highlighted by more than 60 free walks, bike rides, and other events.
The activities aim to encourage people to change their transportation behavior by experiencing Boulder’s 300+ miles of award-winning bike trails. It’s these multimodal corridors that elevate Boulder’s alternative transportation culture. Boulder was ranked #3 Bike-Friendly City by PeopleForBikes in 2018.
GO Boulder – part of Boulder’s transportation department – is focused on enhancing the city’s multi-modal transportation system and reducing single-car usage. The goal is to increase the travel choices available and create an innovative transportation system that sustains the quality of life valued by Boulder residents.
But bikers and walkers who share the road with cars can be at risk of harm. That’s why the City of Boulder developed its Vision Zero program. Vision Zero focuses on making other-than-car transportation safer by reducing the number of traffic-related fatalities and serious injuries to zero. Program components include targeted improvements to street design, enforcement, and outreach efforts in places where they are needed most.
Bike to Work Day 2018 has come and gone, but in Boulder, every day is a great day to commute by a means other than car. Get more information on alternatives and bike paths and get out there!