Colorado Counties Treasurers Association Place cover image here Richard Wobbekind Executive Director, Business Research Division June 21, 2016
Real GDP Growth Quarterly and Annualized Real GDP 1990-2016 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 Sources: Bureau of Economic Analysis and June 2015 NABE Forecast.
Recession 8 Months Recession 18 Months Real GDP and Potential GDP Trillions, USD 22 Actual Projected 20 18 16 14 Potential GDP Real GDP 12 10 2000 2002 2005 2008 2011 2013 2016 2019 2022 2024 Source: Congressional Budget Office, Budget and Economic Outlook, Fiscal Years 2015 to 2025.
Recession 8 Months National Employment Thousands, Month-over- Month 500 300 100-100 -300-500 -700 Recession 18 Months 3-Month Moving Average -900 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, Moody s Analytics, and the BRD.
Employment Recovery Pre-Recession Peak to April 2016 Source: Bureau of Labor Statistics (Seasonally Adjusted).
Consumption
U.S. Income and Consumption Percent Change 4.0 Disposable Personal Income Percent Change 4.0 Personal Consumption 3.0 2.6% 2.4% 3.0 2.6% 2.5% 2.0 2.0 1.0 1.0 0.0 0.0-1.0-1.0-2.0 2005 2007 2009 2011 2013 2015 2017-2.0 2005 2007 2009 2011 2013 2015 2017 Sources: Bureau of Economic Analysis and Blue Chip Economic Indicators.
National Personal Income Growth 2015 Q1 to 2016 Q1 -CO Percent Change: 4.2% -16 th -fastest YoY -7 th -fastest QoQ -CO Per Capita Growth: 2.2% -39 th highest in nation Source: Bureau of Economic Analysis
Household Wealth Q4 2000-Q4 2015 $ Trillions 120 100 80 Other Assets 60 40 20 0-20 Q1 2001 Q1 2004 Q1 2007 Q1 2010 Q1 2013 Q1 2016 Mutual Funds Corporate Equities Real Estate Total Liabilities Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B.101) (Not Seasonally Adjusted).
National FHFA Home Price Growth Year-over-Year Q1 2016 Source: Federal Housing Finance Agency Home Price Index, All Transactions Index.
Index of Consumer Confidence 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Plans to buy a home in the next 6 months New Lived in Uncertain 5.9 May 2015 6.0 May 2016 1985=100 160 140 120 100 80 60 40 20 National and Mountain Consumer Confidence Mountain Region U.S. 0 1995 1997 2000 2003 2005 2008 2011 2013 2016 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 5,000 5.0 0.0-5.0-10.0 0 2003 2005 2007 2009 2011 2013 2016-15.0 2003 2005 2007 2009 2011 2013 2016 Sources: Autodata Corp., Motor Intelligence, U.S. Census Bureau (Seasonally Adjusted Annual Rate).
Nominal Corporate Profits and U.S. Business Fixed Investment Percent Change Nominal Pre-Tax Corporate Profits Percent Change Business Fixed Investment 30.0 10.0 25.0 20.0 15.0 10.0 5.0 0.0-5.0-10.0-15.0 2.8% -2.6% 5.0 0.0-5.0-10.0-15.0 0.0% 3.7% -20.0 2003 2005 2007 2009 2011 2013 2015 2017-20.0 2003 2005 2007 2009 2011 2013 2015 2017 Sources: Bureau of Economic Analysis, Consensus Forecasts.
Housing Affordability Index Composite Index 220 180 140 100 60 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: National Association of Realtors.
National Housing Starts Millions 2.5 2.0 1.5 1.0 1.20 1.35 0.5 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Consensus Forecasts.
Federal Budget Balance $ Billions 400 200 0-200 -400-600 -800 -$520 -$534-1,000-1,200-1,400-1,600 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sources: Office of Management and Budget and Consensus Forecasts.
International Growth, Real GDP % Change Asia Pacific United States North America 2015 2016 2017 European Union Latin America Eastern Europe -1.0 0.0 1.0 2.0 3.0 4.0 5.0 Percentage Change (%) Source: Consensus Forecasts.
Money, Interest Rates, and Prices
Interest Rates 2001-2017 (Forecast) Percent 8.0 7.0 6.0 5.0 10-Year Treasury 4.0 3.0 2.0 1.0 3-Month Treasury 0.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: Moody s Analytics.
Mortgage Rates Percent 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 30-Year Fixed Mortgage 15-Year Fixed Mortgage 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Bloomberg, U.S. Department of the Treasury.
Percent of Balance 90+ Days Delinquent by Loan Type Percent 16% 14% 12% Credit Card 10% Student Loan 8% 6% Auto All 4% 2% Mortgage Home Equity Line 0% 2003 Q2 2004 Q3 2005 Q4 2007 Q1 2008 Q2 2009 Q3 2010 Q4 2012 Q1 2013 Q2 2014 Q3 2015 Q4
National Inflation Percent 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% All Items All Items Less Food and Energy -2.0% Fed Target -3.0% 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: Bureau of Labor Statistics Consumer Price Index, Moody s Analytics.
International and National Summary Employment growth continues GDP growth below potential Balance sheets strong Global output and trade growth varies Strong value of the dollar Rising (but low) interest rates Subdued inflation
Colorado Economy
Change in Population Change in Colorado Population Thousands 2004-2040 120 100 80 60 40 20 0 2004 2009 2014 2019 2024 2029 2034 2039 Net Migration Natural Increase 2nd-fastest state for percentage growth 7th-fastest state for absolute growth 22nd-most populated state in nation 5th-most net migration since 2010 Only 14 counties with net out migration Source: Colorado Demography Office.
Colorado Employment and Education, 2015 Other 38% Employment by Occupation Management 5% Business and Financial Transportation 7% and Material Moving Occupations 4% Food Preparation and Serving Related Occupations 10% Educational Attainment Adults over age 25 with a bachelor s degree or higher U.S. 29.3% Colorado 37.5% Denver MSA 39.8% Adults over age 25 with a high school diploma or higher Healthcare Practitioners and Technical 5% Education Training and Library 7% Sales and Related Occupations 10% Office and Administrative Support Occupations 14% U.S. 86.3% Colorado 90.4% Denver MSA 89.8% Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages; Census, 2014 American Community Survey 1-Year Estimates.
Colorado Employment Growth Jobs Added, 1991-2016 Thousands 100 65,100 50 0-50 Best years since 2000-100 -150 1991 1996 2001 2006 2011 2016 Source: Bureau of Economic Analysis, NIPA Table 3.18B, Consensus Forecasts.
Colorado Employment Change May 2015 May 2016 Employment in Thousands 2,610 2,600 2,590 PBS TTU Financial MFG Info Other Mining 2015 2,580 2,570 Govt EHS Total jobs lost: 5,300 2,560 2,550 L&H Const Total jobs gained: 67,300 Net change: 62,000 2,540 2,530 2014 2,520 Source: Bureau of Labor Statistics, Current Employment Statistics (SA).
Employment Change 2015-2016 BEOF Forecast Professional and Business Services Education and Health Services Trade, Transportation, and Utilities Construction Leisure and Hospitality Government Financial Activities Manufacturing Other Services Information Natural Resources and Mining -4.0 0.0 4.0 8.0 12.0 16.0 Thousands of Jobs Source: Boulder Economic Outlook Forum (BEOF).
Employment Recovery National, State, and Local Percent 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% Ft. Collins- Loveland Greeley Pueblo Colorado Springs Colorado National Grand Junction Denver Boulder 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Number of Months Since Peak Source: Bureau of Labor Statistics (Seasonally Adjusted).
Regional Employment Growth and Unemployment Employment Growth Rate, May YoY Unemployment Rate May 2016 Denver-Aurora- Broomfield Fort Collins- Loveland Colorado 2.4% Denver-Aurora- Broomfield Fort Collins- Loveland Colorado 3.6% Boulder Colorado Springs Colorado Springs Pueblo Pueblo Boulder Greeley Greeley Grand Junction Grand Junction 0 1 2 3 4 Percentage 0 2 4 6 Percentage Sources: Bureau of Labor Statistics CES (Seasonally Adjusted) and LAUS (Not Seasonally Adjusted).
Colorado Employment Months to Recovery Percent 12.0 10.0 8.0 6.0 January 2008-May 2016 4.0 2.0 0.0-2.0 January 2001-January 2009-4.0-6.0-8.0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 Number of Months Since Peak Source: Bureau of Labor Statistics (Seasonally Adjusted).
The Top 5 vs. The Bottom 5 States Jobs Added in 2016 and 2017 Forecast 2016 2017 (1) Arizona (2) Florida (3) Nevada (4T) Georgia (4T) Utah (7) Colorado (47T) Alaska (47T) Illinois (49) (50T) (50T) West 0.0% 1.0% 2.0% 3.0% 4.0% (1) Arizona (2) Florida (3T) Texas (3T) Wyoming (5) Colorado (47T) Alaska (47T) Hawaii (49) District of Columbia (50T) Illinois (50T) Louisiana 0.0% 1.0% 2.0% 3.0% 4.0% Source: Moody s Analytics, Economy.com.
Colorado Total Nonfarm Wages 4Q Rolling Sum $ Billions 140 130 120 110 100 90 80 70 Q4 2002 Q1 2006 Q2 2009 Q3 2012 Q4 2015 Source : Bureau of Labor Statistics, QCEW.
Colorado Per Capita Personal Income By MSA, 2014 United States $46,049 Colorado $48,869 Boulder Denver-Aurora-Lakewood Fort Collins Colorado Springs Greeley Grand Junction Pueblo $20,000 $30,000 $40,000 $50,000 $60,000 Source: Bureau of Economic Analysis, 2013 annual data.
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Federal Housing Finance Agency (FHFA) House Price Index Federal Housing Finance Agency Home Prices by MSA Q1 2015 Q1 2016 Boulder Denver-Aurora-Lakewood Greeley Fort Collins Pueblo Colorado Springs Colorado 12.5% Federal Housing Finance Agency Home Prices by MSA CAGR Q1 2006 Q1 2016 Boulder Denver-Aurora-Lakewood Greeley Fort Collins Pueblo Colorado Springs Colorado 2.7% Grand Junction 0% 3% 6% 9% 12% 15% Percent Grand Junction 0% 1% 2% 3% 4% Percent Source: Federal Housing Finance Agency, All Transactions Indexes.
Residential Building Permits 2006-2016 45,000 April YTD 2015-2016 40,000 35,000 30,000 25,000 Multifamily 20,000 15,000 10,000 5,000 Single Family 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: U.S. Census Bureau and Colorado Business Economic Outlook Committee. YTD April 2015 YTD April 2016
Value of Construction Colorado 2006-2016 $ Millions 18,000 18,000 April YTD 2015-2016 16,000 16,000 14,000 12,000 Nonbuilding Nonresidential Residential 14,000 12,000 10,000 10,000 8,000 8,000 6,000 6,000 4,000 4,000 2,000 2,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 2015 2016 Source: McGraw-Hill Construction.
Retail Trade Sales 12-Month Rolling Sum 12-Month Rolling Sum, $ Millions 100 95 90 85 80 75 70 65 28 Months 60 55 43 Months Colorado taxable retail sales in real dollars is expected to grow by 2.3% in 2016 and 2017 Nominal growth in Colorado taxable retail sales is 4.7% over the next two years 50 2001 2003 2005 2007 2009 2011 2013 2015 Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.
National Consumer Expenditures by Age Portion of Taxable Expenditures in Colorado Percent of Taxable Expenditures 38% 36% 34% 32% 30% 28% 26% 24% 22% 20% 18% Under Age 25 25 to 34 35 to 44 45 to 54 55 to 64 Over Age 65 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: Based on data from the Bureau of Labor Statistics, Consumer Expenditure Survey, 2004-2014. Calculations based on Colorado Taxable goods and includes Alcoholic Beverages, Apparel and Services, Food Away from Home, Household Furnishings and Equipment, Housekeeping Supplies, Personal Care Products and Services, Reading, Tobacco Products and Smoking Supplies, and Vehicle Purchases (net outlay) divided by Total Average Annual Expenditures
Colorado General Fund $ Millions $12,000 $10,000 $8,000 Excise $6,000 $4,000 Individual and Corporate Income $2,000 Sales, Use, and Other Excise $0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Fiscal Years Source: Colorado Office of the State Controller and the Colorado Office of State Planning and Budgeting. Note: Excludes revenue transferred to the State Education Fund.
State Summary Colorado better than nation in employment growth Energy Impact Falling unemployment/labor Force pressures Full employment Growing population/strong in-migration
U.S. and Colorado Economies Q1 2006-Q3 2016 Index (50=Neutral) 80 National and State Expectations 75 70 65 60 Colorado 55 50 45 40 35 United States 30 25 20 Q3 2004 Q3 2005 Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Source: Business Research Division, Leeds School of Business.
Employment and New Entity Filings Employment, thousands 2,700 12-month total new entity filings 120,000 2,600 110,000 2,500 Employment 100,000 2,400 90,000 2,300 2,200 New Entity Filings 80,000 70,000 2,100 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 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
Concerns Fed funds target rate Cost of housing Availability of labor Short Term Long Term Aging Population Price of oil El Niño Median family income
Thank you
Colorado Severance Taxes Severance Taxes, 12-Mo. Rolling Sum $350 WTI, 12-Mo. Ave. $/Barrel $120 $300 $250 Severance Taxes (L Axis) WTI Spot Price (R Axis) $110 $100 $200 $90 $150 $80 $100 $70 $50 $60 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: Energy Information Association (EIA), Cushing, OK WTI Spot Price FOB; Colorado Department of Revenue. $50
State Business Tax Climate Index State Rankings 2015 and 2016 Category 2015 Ranking 2016 Ranking Change Colorado 20 18 +2 Iowa 41 40 +1 Kansas 22 22 0 Missouri 17 17 0 Nebraska 29 27 +2 Oklahoma 32 33-1 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.
CA IN MS NJ RI TN MN NV AR WA CT IL MA TX KS FL ID IA KY MD MI PA SC VT WV UT DC OH AZ ME NV VA NM ND WI NC OK MO AL GA HI LA NY SD WY CO AK DE MT NH OR State Sales Tax Rate 2015 State Sales Tax, 2015 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% U.S. Average: 5.1% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Tax Foundation.
TN AR LA AL WA OK NY CA KS IL AZ TX NV MO CO NM MN SC OH MS INRI NJ GA NC NE IA UT FL ND CT PA MA VT WV ID MD MI KY SD DC VA ME WY WI HI AL DE MT OR NH Combined State and Local Sales Tax Rate State and Local Sales Tax, 2015 10.0% 9.0% 8.0% 7.0% 6.0% U.S. Average: 6.4% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Tax Foundation.
AK FL NH NV PA SD TX WA WY TN NM ND OH HI MS DE OK LARI IN MA KS NJ KY AZ AL SC ME IL WV GA VT ID NC WI NE MN MD UT CT MT IA AR NY CO CA MO VAMI OR State Personal Income Tax Revenue Percent of General Revenue that Stems from Personal Income Tax Percent of General Fund 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: National Association of Budget Officers, The Fiscal Survey of States, Fall 2015. Calculations by BRD staff.