The strength of the local Colorado Springs economy and the diversified growth of the state economy were among the top highlights from the 22nd UCCS Economic Forum Oct. 4 at the Ent Center for the Arts.
Tatiana Bailey, director, UCCS Economic Forum, forecasted that the gross metropolitan product will continue to grow faster than the national rate by approximately one percent at 3.7 percent in 2018 and 3.5 percent in 2019. Colorado Springs ranked in the top 25 percent for GMP growth last year and local consumer sentiment is nine percent higher than the national rate.
The number of jobs in Colorado Springs increased 3.9 percent in the last year with the largest growth in health care, professional and technical assistance, construction and hospitality. The number of jobs has kept pace with the population growth of El Paso County, and the county population is projected to surpass Denver County by 2020.
“We are transforming into more of a high-tech, high-skill economy,” Bailey said about Colorado Springs. The median salary for posted jobs is more than $4,000 higher than the state. Private wages continue to lag behind the state and national averages for a host of historic reasons. “That will need to change moving forward if we are going to attract the brightest, most qualified workers.”
Colorado Springs is the fastest-growing city for millennials based on tracking by the Brookings Institution and had the additional benefit of being one of the most educated regions in the country. Affordability for young people in particular, is a challenge as local home prices have increased almost 14 percent in the past year while national rates have increased about 5 percent. Commercial real estate prices have not increased as much and they are 40 to 50 percent lower in most categories compared to Denver. Another asset is that the Colorado Springs Airport enplanements are up 14 percent in the past year. Tax revenue from tourism reached nearly $100 million in 2017, which should only increase with the new city attractions coming online in the next 1-2 years.
Statewide, the gross state product increases mirrors the local growth, and Colorado represented the second-largest growth in the country in 2017. Twelve employment sectors saw growth between 2 and 8.5 percent with more than 56,000 new jobs in 2017.
Tim Quinlan, director and senior economist, Wells Fargo Securities, provided his insight on the national and global economics. He started with the tariff discussions and predicted they may not be as disruptive in the near term but cautioned that a long-term trade war with China would likely favor the Chinese.
Quinlan also provided budget forecasts for gross domestic product that shows most models agree with 3 percent growth in the next two years. But modeling from Wells Fargo, the Blue Chip Consensus and the Congressional Budget Office show forecasts dropping and staying in the 2 percent range starting in 2021.
The consumer confidence index is at one of its all-time highs. The labor market remains strong with nearly seven million total job openings in July 2018 and he said that businesses should “brace for much higher wage growth.” He referenced Amazon’s announcement this week that included a new $15 minimum wage for all current and seasonal employees.
The annual Forum concluded with a question-and-answer discussion with Bailey, Quinlan, Colorado Springs Mayor John Suthers, Downtown Partnership President and Chief Executive Officer Susan Edmondson, and Colorado Springs Chamber and Economic Development Corporation President and Chief Executive Officer Dirk Draper. UCCS Chancellor Venkat Reddy and College of Business Dean Stephen Ferris provided introductory remarks to the attendees.
UCCS College of Business professors Tom Zwirlein and Jeff Ferguson started the forum in 1997, then known as the Southern Colorado Economic Forum. Later, Fred Crowley, a senior instructor in the College of Business, worked with Zwirlein and helped build the forum into a half-day event. Bailey joined the forum in 2014 when Zwirlein and Crowley retired. In 2016, the forum’s name changed to UCCS Economic Forum to reflect a broader scope of analytical work and consulting projects and to emphasize its UCCS roots.