What s Ahead for The Colorado Economy? Colorado Counties Inc. Place cover image here Richard Wobbekind Senior Economist and Associate Dean for Business and Government Relations November 28, 2017
Real GDP Growth Quarterly and Annualized Real GDP 1990-2017 Percent 10.0 8.0 6.0 4.0 2.0 0.0-2.0-4.0-6.0-8.0 Annualized GDP 1990-1999 Annualized GDP 2000-2009 Annualized GDP 2010- Present Quarterly GDP -10.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Bureau of Economic Analysis and November 2017 Consensus Forecast.
Long-Term Real GDP Growth Trend Percent Change 20-Year Quarterly Moving Average 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1967 1973 1978 1984 1989 1995 2000 2006 2011 2017 Source: Bureau of Economic Analysis, Real GDP.
Economic Growth Percent Change 8 6 4 2 0-2 -4-6 Percent Change 25 20 15 10 5 0-5 -10-15 -20-25 -30 Personal Consumption Expenditures Year-over-Year 00 01 02 04 05 07 08 09 11 12 14 15 17 Year Fixed Business Investment Quarterly SAAR Year-over-Year Quarterly SAAR 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Year Percent Change 10 8 6 4 2 0-2 -4-6 -8-10 Percent Change 20 15 10 5 0-5 -10-15 -20-25 Government Spending Year-over-Year Quarterly SAAR 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Year Exports Net Exports Imports 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Year Sources: Bureau of Economic Analysis, the National Bureau of Economic Research, and the Business Research Division.
Thousands, Month-over- Month, 12-Mo Average 300 200 100 0-100 National Employment Month-over-Month Change, 12-Month Average -200-300 -400-500 Recession 8 Months Recession 18 Months -600 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Bureau of Labor Statistics (Seasonally Adjusted), Moody s Analytics, and NBER.
State Employment Growth Year-over-Year October 2017 Source: Bureau of Labor Statistics (Seasonally Adjusted).
Labor Underutilization Percentage of Labor Force 18.0 16.0 14.0 12.0 10.0 Average U-6 U-6 8.0 7.9% 6.0 4.0 Average U-3 U-3 4.1% 2.0 0.0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: Bureau of Labor Statistics (Seasonally Adjusted).
Labor Force Participation Rates National by Age Cohort Percent 90 80 70 1986 2017 1998 1990 1997 Peak 2009 60 50 40 30 20 2017 Current 2017 10 0 20-24 25-34 35-44 45-54 55-64 65 + Age Group Source: Bureau of Labor Statistics, Current Population Survey (CPS).
Labor Force and Unemployment Rate National by Educational Attainment, Population 25 and Over, September 2017 Percentage 80 70 60 50 LFPR 40 30 20 10 Unemployment Rate 0 Less than a high school diploma High school graduates Some college, no degree Associate degree Bachelor's degree Advanced degree Source: Bureau of Labor Statistics, Current Population Survey (CPS), Not Seasonally Adjusted.
Wage Growth Year-over-Year Percent Change 4.0% 3.0% 2.0% Year-over-Year 12-Month Average 1.0% 0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Labor Statistics, CES, Average hourly earnings of all employees, total private, seasonally adjusted.
National Personal Income Growth 2016 Q2 to 2017 Q2 - CO Percent Change: 4.9% - 7 th fastest YoY - 13 th fastest QoQ - CO Per Capita Income Percent Change: 2.2% - 27 th fastest YoY - 40 th fastest QoQ Source: Bureau of Economic Analysis
U.S. Income and Consumption Percent Change 5.0 Real Disposable Income Percent Change 4.0 Real Personal Consumption 4.0 3.0 2.4% 3.0 2.0 2.7% 2.5% 2.0 1.0 1.4% 1.0 0.0 0.0-1.0-1.0-2.0-2.0-3.0 2007 2009 2011 2013 2015 2017-3.0 2008 2010 2012 2014 2016 2018 Sources: Consensus Forecasts.
Household Wealth Q1 2000-Q2 2017 $ Trillions 120 100 80 Other Assets 60 40 20 Mutual Funds Corporate Equities Real Estate 0 2000 2004 2008 2012 2017 Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B.101) (Not Seasonally Adjusted).
Household Debt Burden Percent of Disposable Income DSR 13.5 13.0 12.5 12.0 11.5 Debt Service Ratio (L) FOR 18.4 17.9 17.4 16.9 11.0 10.5 10.0 9.5 Financial Obligations Ratio (R) 16.4 15.9 15.4 9.0 14.9 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: Federal Reserve, Household Debt Service and Obligations Ratios.
Index of Consumer Confidence 1985=100 Recession 8 months 160 Recession 18 months 140 Mountain Region 120 100 80 United States 60 40 20 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Sources: The Conference Board and National Bureau of Economic Research.
Vehicle Sales and Retail Sales Thousands, SAAR 25,000 Vehicle Sales Retail and Food Services Sales Annual Percent Change 15.0 20,000 10.0 15,000 10,000 5.0 0.0-5.0 5,000-10.0 0 2003 2005 2007 2009 2011 2013 2015 2017-15.0 2004 2006 2008 2010 2012 2014 2017 Sources: Bureau of Economic Analysis, Moody s Analytics, U.S. Census Bureau (Seasonally Adjusted Annual Rate).
Nominal Corporate Profits and Business Fixed Investment Percent Change Nominal Pre-Tax Corporate Profits Percent Change Business Fixed Investment 30.0 10.0 25.0 20.0 5.0 4.5% 4.4% 15.0 10.0 5.0 4.7% 3.9% 0.0-5.0 0.0-5.0-10.0-10.0-15.0-15.0-20.0 2004 2006 2008 2010 2012 2014 2016 2018-20.0 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Bureau of Economic Analysis, Consensus Forecasts.
ISM Indices 70 65 60 ISM Manufacturing Index 70 65 60 ISM Non-Manufacturing Index 55 55 50 50 45 45 40 40 35 35 30 2003 2005 2007 2009 2011 2013 2015 2017 30 2003 2005 2007 2009 2011 2013 2015 2017 Source: Institute for Supply Management (ISM).
S&P/Case-Shiller Home Price Indices 1-year Home Price Change, August 2017 Source: Standard & Poor s (Not Seasonally Adjusted). Washington D.C. Chicago New York Cleveland Miami Atlanta Minneapolis Phoenix Los Angeles San Francisco Charlotte Boston Tampa Dallas San Diego Detroit Portland Denver Las Vegas Seattle 0% 2% 4% 6% 8% 10% 12% 14% 16% Percent Change
National FHFA Home Price Growth Year over Year Q2 2017 Source: Federal Housing Finance Agency Home Price Index, All Transactions Index.
National Housing Starts Millions 2.5 2.0 1.5 1.0 1.2 1.3 0.5 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sources: U.S. Census Bureau and Consensus Forecasts.
Federal Budget Balance $ Billions 0-200 -400-600 -800 -$666 -$685-1,000-1,200-1,400-1,600 2002 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Bureau of Economic Analysis and Consensus Forecasts.
U.S. Nominal Broad Dollar Index and Real Net Exports U.S. Nominal Broad Dollar Index 1973=100 130 125 $ Billions 0-100 Real Net Exports 120 115 110 105 100 95 90 2001 2003 2005 2007 2009 2011 2013 2015 2017-200 -300-400 -500-600 -700-800 -900 -$609 -$636 2001 2003 2005 2007 2009 2011 2013 2015 2017 Sources: Federal Reserve, Bureau of Economic Analysis, and Consensus Forecasts.
Money, Interest Rates, Credit, and Prices
Interest Rates 2000-2018 (Forecast) Percent 7.0 6.0 10-Year T-Note 5.0 4.0 3.0 2.0 1.0 3-Month T-Bill 0.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Federal Reserve and Moody s.
Mortgage Rates 2000-2018 (Forecast) Percent 9.0 8.0 7.0 30-Year Fixed Mortgage 6.0 15-Year Fixed Mortgage 5.0 4.0 3.0 10-Year Treasury Rate 2.0 1.0 0.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Source: Freddie Mac, Federal Reserve, Moody s Analytics.
The FED $ in Millions 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0-1,000,000-2,000,000 Treasury Securities Federal Agency Debt Securities Deposits Mortgage Backed Securities Other Assets -3,000,000 Reserve Notes Outstanding, Net Holdings -4,000,000 Other Liabilities -5,000,000 2007 2008 2010 2011 2013 2014 2016 2017 Source: Federal Reserve Balance Sheet, H.4.1 Statistical Release.
Total Debt Balance and its Composition Percent 14 12 10 8 6 4 2 Mortgage HE Revolving Auto Loan Credit Card Student Loan Other (3%) (10%) (6%) (9%) (4%) (67%) 0 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017 Source: FRBNY Consumer Credit Panel/Equifax.
National Inflation Year-over-Year Percent Change 6.0 5.0 4.0 3.0 2.0 Shelter All items less food and energy 1.0 0.0 All items -1.0-2.0-3.0 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: Bureau of Labor Statistics, Consumer Price Index (CPI), (SA).
Key Points Slightly higher GDP growth Consumer carried economy for past 5 years Business investment promising Net exports not much help Interest rates rising slowly Low inflation environment
Colorado Economy
Colorado Change in Population Change in Colorado Population 2000-2018 Thousands 140,000 120,000 100,000 80,000 Net Migration 7th-fastest state for percentage growth 8th-fastest state for absolute growth 84% of growth along Front Range 60,000 40,000 20,000 0 2000 2006 2012 2018 Natural Increase Continued net migration into the state Source: Colorado Demography Office.
Colorado Employment Growth Jobs Added Thousands 100 80 60 40 20 0-20 -40-60 -80-100 -120 56,300 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sources: Colorado Department of Labor and Employment and the Colorado Business Economic Outlook Committee.
Colorado Employment Change October 2016 October 2017 Employment in Thousands 2,670 2,660 2,650 EHS Const L&H Info Other Finance Govt MFG Mining 2017 2,640 PBS TTU Total jobs lost: 1,000 2,630 Total jobs gained: 38,800 2,620 2,610 2,600 2016 Net change: 37,800 Source: Bureau of Labor Statistics, Current Employment Statistics (SA).
The Top 5 vs. The Bottom 5 States Jobs Added in 2017 and 2018 Forecast 2017 (1) Nevada (2) Utah (3T) Florida (3T) Georgia (3T) Idaho (10) Colorado (46) Mississippi (47T) Kansas (47T) West Virginia (49) Alaska (50) Wyoming -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 2018 (1) Nevada (2) Texas (3) Oregon (4) Arizona (5) Utah (10T) Colorado (46T) Louisiana (46T) Michigan (48) Wyoming (49) West Virginia (50) Alaska 0.0% 1.0% 2.0% 3.0% 4.0% Source: Moody s Analytics, Economy.com.
Regional Employment Growth and Unemployment Employment Growth Rate, October 2017 YoY Greeley Fort Collins-Loveland Boulder Pueblo Colorado Springs Denver-Aurora- Lakewood Grand Junction Colorado 1.4% -1 0 1 2 3 4 5 Percentage Greeley Fort Collins- Loveland Boulder Pueblo Colorado Springs Denver-Aurora- Lakewood Grand Junction Unemployment Rate October 2017 Colorado 2.6% 0 2 4 6 Percentage Sources: CES (Seasonally Adjusted) and LAUS (Not Seasonally Adjusted).
Employment In Current Decade National, State, and Local Percent 40% 35% 30% 25% 20% 15% 10% 5% Greeley Ft. Collins-Loveland Denver Colorado Boulder Colorado Springs National Pueblo Grand Junction 0% -5% 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Labor Statistics (Seasonally Adjusted).
Natural Resources and Mining
WTI Oil Price Dollars per Barrel $160.00 $140.00 July 3, 2008: $145.31 $120.00 $100.00 $80.00 Average 2005-2017 September 11, 2014: $92.89 September 11, 2017: $48.06 $60.00 $40.00 September 11, 2015: $44.75 $20.00 September 12, 2016: $0.00 $46.28 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Energy Information Association (EIA), Cushing, OK WTI Spot Price FOB.
Henry Hub Natural Gas Spot Price Dollars per Million BTU $16.00 $14.00 July 4, 2008: $13.20 $12.00 $10.00 $8.00 $6.00 September 9, 2016: $2.97 Sept. 8, 2017: $2.91 $4.00 Average 2005-2017 $2.00 Average 2009-2017 $0.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Energy Information Association (EIA), Weekly Henry Hub Natural Gas Spot Price (Dollars per Million Btu).
Colorado Energy Rankings (2016) Metric Total Energy Consumed Per Capita Total Energy Production Crude Oil Production Natural Gas Production Coal Production Electricity Production Solar Energy Production Wind Energy Production Rank 34 th 7 th 7 th 5 th 11 th 28 th 8 th 10 th Hydroelectric Facilities account for one-sixth of renewable power production in the state. There are 60 small hydroelectric generators in Colorado s mountainous western region. Colorado does not have any Nuclear power plants Sources: EIA
Real Estate and Construction Photo Courtesy www.rtd-fastracks.com
Housing Units vs. Households Annual Change 70,000 60,000 2001-2007 120,000 more housing units than households 50,000 40,000 Households 2008-2016 103,000 more households than housing units 30,000 20,000 10,000 Housing Units 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: Colorado State Demography Office. Data as of June 2017.
Federal Housing Finance Agency (FHFA) House Price Index Federal Housing Finance Agency Home Prices by MSA Q2 2016 Q2 2017 Federal Housing Finance Agency Home Prices by MSA CAGR Q2 2007 Q2 2017 Colorado 10.4% Colorado 3.7% Fort Collins Denver-Aurora-Lakewood Boulder Greeley Pueblo Colorado Springs Grand Junction 0% 3% 6% 9% 12% 15% Percent Boulder Denver-Aurora-Lakewood Fort Collins Greeley Colorado Springs Pueblo Grand Junction -1% 0% 1% 2% 3% 4% 5% Percent Source: Federal Housing Finance Agency, All Transactions Indexes.
Residential Building Permits 1995-2017 Permits 60,000 50,000 40,000 Multifamily 30,000 20,000 10,000 Single Family 0 1995 1998 2001 2004 2007 2010 2013 2016 Source: U.S. Census Bureau. Sep. 2016 YTD Sep. 2017 YTD
Value of Construction 1995-2017 Value in Billions 20 18 16 14 Non-Building Non-Residential Residential 12 10 8 6 4 2 0 1995 1998 2001 2004 2007 2010 2013 2016 Source: McGraw-Hill Construction Dodge Research and Analytics. Oct. 2016 YTD Oct. 2017 YTD
Colorado Foreclosures 2003-2017 80,000 YTD Foreclosures and Sales 70,000 60,000 50,000 Sales 40,000 30,000 20,000 10,000 0 Filings 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 Q1 2017 Q1 Source: Colorado Division of Housing.
Retail Trade Sales Colorado Taxable Retail Sales 12-Month Rolling Sum 12-Month Rolling Sum, $ Millions 95 90 85 Percent Change 10.0 5.0 Colorado Retail Trade Sales 2007-2017 Nominal Growth 4.4 80 75 70 65 70 Months 0.0-5.0 Real Growth 60-10.0 55 50 2001 2003 2006 2008 2011 2013 2016-15.0 2007 2009 2011 2013 2015 2017 Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.
Colorado Sales Taxes $ Millions, 12-Month Rolling Sum $ Millions, 12-Month Rolling Sum $3,000 $2,500 $2,000 General Fund Sales Taxes Net Sales Taxes $1,500 $1,000 $500 Note: Colorado Dept. of Revenue retail sales reports are current through February 2016 (Left Axis). General Fund sales taxes are available through August 2017 (Left Axis). $0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sources: Colorado Office of the State Controller and the Colorado Department of Revenue.
Colorado General Fund $ Millions $14,000 $12,000 $10,000 $8,000 Excise $6,000 $4,000 Individual and Corporate Income $2,000 $0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Sales, Use, and Other Excise 2006 2007 2008 Fiscal Years 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Colorado Office of the State Controller and the Colorado Office of State Planning and Budgeting (September 2017). Note: Excludes revenue transferred to the State Education Fund.
State Business Tax Climate Index State Rankings (2016 and 2017) Category 2016 Ranking 2017 Ranking Change Colorado 18 16 +2 Iowa 40 40 0 Kansas 22 22 0 Missouri 17 15 +2 Nebraska 27 25 +2 Oklahoma 33 31 +2 South Dakota 2 2 0 Wyoming 1 1 0 Note: A rank of 1 is more favorable for business than a rank of 50. Source: Tax Foundation.
Marijuana and Hemp
YTD Marijuana Tax and Fee Revenue YTD totals, September, 2014-2017 Millions of Dollars $200 $150 October YTD totals 2014: $67.6 Million 2015: $130.4 Million 2016: $193.6 Million 2017: $205.1 Million $100 $50 $0 2014 2015 2016 2017 Source: Colorado Department of Revenue, Taxation Division.
County Marijuana Tax and Fee Revenue Annual 2016, Grey Counties Forbid Medical and Retail Marijuana Sales Largest: Denver County $14,129,757 Source: The Gazette, (Colorado Springs Newspaper).
Colorado Industrial Hemp Production Annual, 2016 2016 Totals Increase Over Prior Year Increase Since 2014 Registered Acres 8,988 145% 396% Registered Sq. Ft 1.36 Million 138% 438% Active Registrations 424 27% 64% Active Registrants 312 88% 138% 2.2 million square feet of indoor production Colorado accounts for about of half of U.S. industrial hemp production Source: Colorado Department of Agriculture.
U.S. and Colorado Economies Q1 2004 Q1 2018 Index (50=Neutral) 75 70 National and State Expectations 65 60 Colorado 55 50 45 40 35 30 United States 25 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018
Employment and New Entity Filings Employment, thousands 2,700 12-month total new entity filings 120,000 2,600 110,000 2,500 2,400 Employment (L Axis) 100,000 90,000 2,300 80,000 2,200 New Entity Filings (R Axis) 70,000 2,100 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Note: Solid line displays actual seasonally adjusted employment numbers; dotted line reflects calculated forecasts. Source: Seasonally adjusted. Colorado total nonfarm employees from the Bureau of Labor Statistics, Current Employment Statistics (CES), calculations by BRD research team. 60,000
Colorado Ranking Among Other States Metric 1-Year 3-Year 5-Year 10-Year Real GDP Growth 14 7 3 6 Employment Growth 20 11 6 4 Population Growth 7 4 4 3 Personal Income Growth 7 16 2 5 PCPI Growth 36 19 2 33 PCPI 15 14 21 13 Average Annual Pay % Growth 35 26 25 26 Average Annual Pay 10 13 12 10 Unemployment Rate 3 13 28 16 Labor Force % Growth 1 4 4 4 FHFA Home Price Index Growth 3 1 3 1 Data Sources: Bureau of Economic Analysis (2017), Bureau of Labor Statistics (10/17), U.S. Census Bureau (2017), Bureau of Labor Statistics (2017), Bureau Federal Housing Finance Agency All Transactions Index (Q2 2017), BRD calculations. Note: 1-year, 3-year, and 5-year are based on the compound annual growth rate.
Thank You!
Marijuana and Hemp
Marijuana Tax and Fee Revenue Monthly Totals, February, 2014 - September, 2017 Millions of Dollars $25 $20 Peak: August, 2017 $23.8 Million $15 $10 $5 $0 2014 2015 2016 2017 Source: Colorado Department of Revenue, Taxation Division.
Marijuana Conjectures Disclaimer Everybody wants to know Data is very difficult 100,000 people moved to Colorado for MJ last year (taxi driver) All the housing price appreciation is due to Marijuana Effect on business attraction Effect on labor supply Impact on tourism Impact on industrial space Impact on social services Source: Nothing Reliable