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Economic OverviewSlower Growth Near-term
Chris AkersColorado State Demography Office#COPopulation #CODemogSummit
November 1, 2019
Looking Back over last 8 years• 2011: Growth Slow & Fragile• 2012: Economy Slowing in 2013• 2013: Gradually Recovering• 2014: Warning Signs Widespread• 2015: Sprinting or Plodding• 2016: Growing but Slowing• 2017: Moderating Growth, Maturing Recovery• 2018: Steady but Slowing Growth• 2019: Slower Growth Near-term
Economic OverviewSlower Growth… Again
What About It?Chris Akers
Colorado State Demography Office#COPopulation #CODemogSummit
WORLD ECONOMIC OUTLOOK UPDATE (IMF JANUARY 2018)-CHRISTINE LAGARDE SAID AT DAVOS:
“Global growth has been accelerating since mid-2016, and all signs point to a further strengthening both this year and next. This is very welcome news.”
‘At the same time, while growth is higher, it is mostly cyclical. Absent reforms, the fundamental forces that had us worried about the “new mediocre” – and future growth potential – will remain in place.’
https://www.imf.org/en/News/Articles/2018/01/22/sp012218-opening-remarks-for-the-world-economic-outlook-update-press-conference
GLOBAL ECONOMIC OUTLOOK (IMF OCT ‘19)
https://www.youtube.com/watch?v=Y1m5NDLDKxE
Colorado Economic OutlookThings that will not be covered this year:
• Unemployment Rates
• Inflation and Wage Growth
• Worker Shortages (JOLTS)
• Federal Funds Rate (now at 1.5 - 1.75%)
• Short-term outlook (2019 / 2020)
• Rising Risk of Recession
• Colorado Employment Growth relative to other states
• Productivity Growth
SDO ECONOMIC FORECAST APPROACHU.S. Macro Economic Forecast (Moody’s Analytics)• 86 Variables pulled from 1960 to 2048
• U.S. Population, GDP, CPI, Employment, Oil Price, Interest Rates
• Incorporate 25 State Variables from 1970 to 2018• Employment, Unemployment, Income, Population, Birth/Death Rate, Housing Permits
• Incorporate County-level variables from 1990 to 2050• Population, Civilian Pop, LFPR, Unemp. Rt., MJHR, Commuting, Income
Project employment for Colorado Statewide 2019-40
• Project out all 14 Planning Regions & Force Regions to State
• Project 58 counties within Regions & Force Counties to Regions
Longest U.S. Expansion on Record!
39
24
108
36
58
12
92
120
73
124
0
20
40
60
80
100
120
140
1954 1958 1961 1970 1975 1980 1982 1991 2001 2009
Mon
ths o
f Exp
ansio
n
Trough Year
Length of U.S. Expansions Post WWII (Number of months, Trough to Peak)
Also the Slowest Expansion
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%19
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
1420
1520
1620
1720
1820
19
GDP Growth by Year and Expansion Average
4.3%3.8%
2.8%2.3%
Annual Job Growth in U.S.Years Average Annual Job
Change (#) Max Change (Year) Average Annual
Growth Rate (%)1983 – 1989 2.8 Million 4.2 Million (1983) 2.8%
1990 - 1991 -367K -1.1 Million (1990) -0.3%
1992 - 1999 2.6 Million 3.2 million (1997) 2.4%
2000 - 2002 -875 K -1.4 Million (2001) -0.4 %
2003 – 2006 1.9 Million 2.4 Million (2005) 1.4%
2007 – 2009 -2.5 Million -5.9 Million (2008) -1.9%
2010 – 2018 2.4 Million 2.9 Million (2014) 1.5%
2020 - 2040 910 K 1.3 Million (2021) 0.6%
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000
UtilitiesMining
Management of companiesAgriculture
Federal GovernmentPrivate Education
InformationArts, Entertainment & Rec
Transportation and…Wholesale trade
Real estateState Government
Finance activitiesManufacturingOther services
Admin and wasteConstruction
Local GovernmentAccommodation and food
Retail TradeProfessional and Tech. services
Health Services
Colorado 2018 Total Employment by Industry & Wage
Low Wage ($23,400-$44,000) Mid Wage ($48,500 - $70,700) High Wage ($84,000 - $136,100)
3.39 Million Total Estimated Jobs$59,000 Average Annual Wage
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
Management of companiesUtilities
InformationPrivate Education
Federal GovernmentMining
Finance activitiesWholesale trade
Transportation and warehousingManufacturing
State GovernmentArts, Entertainment & Rec
Real estateAdmin and waste
Professional and Tech. servicesAgriculture
Other servicesConstruction
Health ServicesRetail Trade
Local GovernmentAccommodation and food
Non Front Range Colorado 2018 Total Employment by Industry & Wage
Low Wage ($25,400-$35,000) Mid Wage ($37,100 - $52,900) High Wage ($68,600 - $105,600)
600K Total Estimated Jobs$44,800 Average Annual Wage
Total Jobs 2018 & OTY Change• U.S. – 149.1 million, + 2.45 million (1.7%)• Colorado – 3,389,300 + 87,700 (2.7%)
+78.5 K in 10 Counties or 89.5% of State
-1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000
Federal GovernmentUtilities
Finance activitiesAgriculture
Admin and wasteWholesale trade
Management of companiesPrivate Education
ManufacturingArts, Entertainment & Rec
State GovernmentRetail TradeReal estate
MiningLocal Government
Other servicesHealth Services
Accommodation and foodInformation
ConstructionTransportation and warehousing
Professional and Tech. services
Colorado 2018 Annual Employment Change by Industry & Wage
Low Wage ($23,400-$44,000) Mid Wage ($48,500 - $70,700) High Wage ($84,000 - $136,100)
Annual Gain = 87,700 or 2.7%
-500 0 500 1,000 1,500 2,000
Finance activitiesHealth Services
Federal GovernmentUtilities
Management of companiesInformation
Other servicesPrivate Education
AgricultureWholesale trade
Admin and wasteMining
Arts, Entertainment & RecState Government
ManufacturingRetail Trade
Transportation and warehousingReal estate
Local GovernmentAccommodation and food
Professional and Tech. servicesConstruction
Non Front Range Colorado 2018 Annual Employment Change by Industry & Wage
Low Wage ($25,400-$35,000) Mid Wage ($37,100 - $52,900) High Wage ($68,600 - $105,600)
Annual Gain = 9,300 or 1.6%
2008-2018 Job Change• U.S. + 11.8 million or 0.8% annualized• Colorado + 468,900 or 1.5% annualized
10 Counties + 461K or 98.4% of State
-10,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
UtilitiesFederal Government
MiningInformation
ManufacturingFinance activitiesWholesale trade
AgricultureManagement of companies
ConstructionReal estate
Admin and wasteArts, Entertainment & Rec
Private EducationRetail Trade
Other servicesLocal GovernmentState Government
Transportation and warehousingAccommodation and food
Professional and Tech. servicesHealth Services
Colorado Employment Change by Industry from 2008 to 2018
Low Wage ($23,400-$44,000) Mid Wage ($48,500 - $70,700) High Wage ($84,000 - $136,100)
Total Change = 462,000 or 1.8% Annually
-15,000 -10,000 -5,000 0 5,000 10,000 15,000
ConstructionMining
Finance activitiesInformation
Other servicesRetail Trade
Admin and wasteWholesale trade
Federal GovernmentUtilities
Transportation and warehousingManufacturing
Management of companiesState Government
Real estateProfessional and Tech. services
Local GovernmentPrivate Education
Arts, Entertainment & RecAccommodation and food
AgricultureHealth Services
Non Front Range Colorado Employment Change from 2008 to 2018
Low Wage ($25,400-$35,000) Mid Wage ($37,100 - $52,900) High Wage ($68,600 - $105,600)
Total Employment Change = 7,600 or 0.1% Annually
U.S. Industry Level (BLS)
0.1%
0.4%
0.5%
0.8%
1.1%
1.3%
1.4%
1.5%
1.6%
1.8%
2.3%
2.9%
3.4%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%
Manufacturing
Leisure & Hospitality
Other Services
Wholesale & Retail
Agriculutre
Information
Government
Professional & Business Svcs.
Education, Health Care and Social Assistance
Financial Activies
Mining & Utilities
Construction
Transportation & Warehousing
Projected Annual Rate of Change in Employment (2018-28)
Colorado Industry Level (SDO)
Total All Jobs Annual Growth = 1.5%
0 20,000 40,000 60,000 80,000
Manufacturing
Accomodation and Food Services
Agriculture
Arts, Entertainment, and Recreation
Other Services
Management of Companies
Mining and Utilities
Information
Real Estate
Professional, Scientific, and Technical
Finance and Insurance
Wholesale and Retail
Transportation and Warehousing
Administrative and support and waste
Education, Health Care and Social Assistance
Construction
Government
Colorado Projected Employment Change from 2018 to 2028
Low Wage ($23,000 - $44,000) Mid Wage ($48,000 - $71,000) High Wage ($84,000 - $136,100)
Total Change = 560,000 or 1.5% Annually
What has changed since 2012?• Non-Major Metro counties have mostly been revised down
• 36 are slower now in projected growth and 13 are negative
• Elbert, Phillips and Gunnison are right on track
• Denver Metro, Larimer and Weld have all been revised upward
• Oil & Gas Development boosted Weld
• Build up of extensive transportation and warehousing to allow more efficient distribution of on-line orders
• Continued expansion of RTD lines and Growth at DIA
Job Forecast Highlights 2020 - 40• Employment growth of 910,000 jobs
• 570,000 gain in Local Resident Service Jobs (many in Local Gov.)
• Growth rate peaks at 1.52% (+55,400 jobs) in 2023, then gradually slows. Need for migrants grows due to Baby Boomers retiring and less due to new job creation.
• Annualized Growth Rate = 1.15% (slows to 0.95% from 2030-40)
Job Forecast 2020 - 40• 2040 = 4,444,600 + 910,000 from 2020 (45,500 or 1.2% per year)
+828,000 in Metro Areas or 92% of State
-60,000 0 60,000 120,000 180,000 240,000
Accomodation and Food ServicesArts, Entertainment, and Recreation
ManufacturingOther Services
Mining and UtilitiesAgriculture
InformationManagement of Companies
Real EstateProfessional, Scientific, and Technical
Wholesale and RetailEducation, Health Care and Social Assistance
Finance and InsuranceAdministrative and support and waste
ConstructionGovernment
Transportation and Warehousing
Colorado Projected Employment Change from 2020 to 2040
Two Big Future Trends that could influence the forecast
• Broadband / Connectivity
• 100% Renewable Energy Goals
Broadband / Connectivity• Local Government’s in CO voting out of SB 05-152
• 40% of Muni’s and 66% of CO counties have “opted-out”• Lakewood, Greenwood Village, Parker, Edgewater, Mead, and
Rico are all voting on referenda in 2019• Billions of dollars being spent over the next decade through
Public-Private-Partnerships to build out networks.• Colorado providing an additional $115 million (SB 18-2) in State
Broadband Administrative Fund Grants over next 5 years.• Improves quality of life, health, safety and prospects for increased
work opportunities and earnings in rural Colorado.
100% Renewable Energy Goals• “You have to set audacious goals and big goals… and then have
everybody work like crazy to get there” – Tesla Chair Denholm• Nearly everyone benefits from de-carbonization of Energy • Renewable Goals are the “Broadband” of the next 2 decades
• 10 Municipalities & 2 Counties in Colorado have established goals• Municipal providers are often 1st to achieve - Aspen 2015!• Denver aims to be 100% in its municipal building by 2025
• State of Colorado is a partner and leader• Charge Ahead Grants, Solar Gardens, Renewable Purchase Power
Agreements, Reducing Energy Consumption 15% by FY 2023
A Dr. Seuss-like Summary What happens in the future Economy we truly do not Know.As has been said many times, the SDO expects it to Plateau & Slow.History says sometime it will surely contract… and then again Grow.But it is widely expected that growth rates will be Adagio, Adagio!Unemployment Rates should continue to remain near historic Lows, But this largely depends on how fast the Labor Force Grows. Retirements by Baby Boomers will likely the pace job growth to Slow,The impacts of aging our office by now believes to Foreknow Unknown impacts of Automation, A.I., Budgets, Climate Change, Drought, & more into our forecast could a monkey wrench Throw“Technological progress is key to economic growth”, says Robert Solow
Thank You!