This year, our economic experts really lasered in on the economic ‘state of the state’ and how that compares to the national economic outlook
Denver, CO (PRWEB) February 07, 2014
At Vectra Bank Colorado's 21st Annual Economic Forecast Update, economic experts forecasted continued and sustained growth for Colorado, with the state continuing to outpace the rest of the country. Cast as “a delicate balance,” while economic growth will continue, it was said the state’s current sales tax structure and revenue will not keep up with expected future increased budget expenditures.
Economists Patricia Silverstein, president of Development Research Partners; Dr. Richard Wobbekind, Ph.D., Associate Professor of Business Economics and Finance at the University of Colorado Boulder; and Dr. Phyllis Resnick, Ph.D., Lead Economist with Colorado Futures Center provided insight yesterday on the exciting short-term future, as well as long-term issues facing Denver and Colorado
Overall, experts agreed that Colorado’s stellar growth in 2013 will continue at a healthy pace throughout 2014 and beyond. Last year, Metro Denver saw its highest home sales on record, and Colorado saw its second-fastest growth year since 2000, according to Silverstein. Among the top five states in job growth, Colorado increased jobs by 1.9 percent, 42,000 jobs, said Wobbekind, and he estimated that employment number will be adjusted up to 66,000. Around the state, Greeley saw the highest growth in employment, followed by Metro Denver, Boulder and Pueblo. Conversely, Pueblo, Colorado Springs and Greeley remain the top three for unemployment.
All business sectors thrived in 2013, as every industry cluster enjoyed a growth year for the first time in years, with natural resources industries like oil and gas and aviation coming in as booming industries to watch in 2014.
Wobbekind and Silverstein agreed that the success of 2013 could be toppled if business and consumer confidence falters. Dubbed a “year of records” by Silverstein, the economists cited continued trepidation around federal fiscal issues, taxes and regulation as potential risks.
While the Colorado general fund is increasing at a healthy rate according to Wobbekind, retail trade sales have seen nominal growth since the large increases in 2010. This slowing revenue sales growth is where Resnick turned the spotlight, on what she considers to be serious long-term issues facing the Colorado’s fiscal health and the programs and services it funds.
According to Resnick, unless the state changes its outdated sales tax code that “was made for purchases of good, rather than services, which is more what we buy today,” by 2030, the state will no longer be able to pay for much other than its largest budget areas—K-12 education, Medicaid and the prison system.
More than the tax code, Resnick cites the spending behaviors of Colorado’s growing millennial population and fiscal issues around this “25-year-old living in your basement,” as a huge driver of the state’s funding gap. “The living and buying habits of Colorado’s growing population, many of which are living at home because of large college debt, are quite different than generations prior,” she said. This generation is not buying cars or homes, getting married, or having children at the same rates as the previous generation, all life events that spur the purchase of goods. This, along with their preference to buy online, buy used or swap, use sharing services (such as car sharing) and “couch surf,” instead of staying in hotels leads to a decrease in sales revenue for the state.
“This year, our economic experts really lasered in on the economic ‘state of the state’ and how that compares to the national economic outlook,” said Vectra Bank Colorado President and CEO Bruce Alexander. “Every year, through these forums we work to deliver key insights, trends and drivers that will impact our clients’ financial picture in the coming year. We help them become students of the economy.”
This year, 625 of Denver business leaders attended the invite-only economic forecast update, while 150 watched the conference online through a live webcast. Events are also planned for Broomfield/Boulder, Colorado Springs and Pueblo this month, as well as around the state throughout the year. Speaker presentations and video of the breakfast can be found at http://www.vectrabank.com/denver.
With assets of $2.7 billion, Vectra Bank Colorado is a proactive, customer-focused organization dedicated to real relationship banking. Part of the Zions Bancorporation (NASDAQ:ZION) family of banks, Vectra serves Colorado’s small, middle-market and corporate business clients with 40 locations throughout Colorado, and one in Farmington, N.M. The bank’s website address is http://www.vectrabank.com. Member FDIC.