Dr. Richard Wobbekind Executive Director, Business Research Division and Senior Associate Dean for Academic Programs University of Colorado Boulder Member FDIC VectraBank.com
Economic Outlook 2015 Richard Wobbekind Executive Director Business Research Division & Senior Associate Dean Leeds School of Business
Real GDP Growth Percent Quarterly and Annualized Real GDP 1990-2016 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 Quarterly GDP -10.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sources: Bureau of Economic Analysis and Consensus Forecasts.
National Employment Thousands, Monthover-Month 500 300 Recession 8 Months Recession 18 Months 100-100 -300 12-Month Moving Average -500-700 -900 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and Moody s Analytics
National Employment Months to Recovery Percent 3.0 2.0 1.0 0.0-1.0-2.0-3.0-4.0-5.0-6.0-7.0 1980 1974-76 1981-83 1990-93 2001-05 2008-Present 0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 Number of Months Since Previous Peak Source: Bureau of Labor Statistics, CES (Seasonally Adjusted).
National Employment Growth Peak-to-December 2014 Source: Bureau of Labor Statistics, Seasonally Adjusted.
National Employment 84 Months Since Peak Percent 20.0 15.0 10.0 1974-76 1981-83 1990-93 1980 5.0 0.0-5.0 2001-05 2008-Present -10.0 0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 Number of Months Since Previous Peak Source: Bureau of Labor Statistics, CES (Seasonally Adjusted).
U.S. Income and Consumption Percent Change 4.5 Real Disposable Income 4.0 3.5 3.1% 3.0 2.4% 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0 2005 2007 2009 2011 2013 2015 Percent Change 4.0 Personal Consumption 3.2% 3.0 2.5% 2.0 1.0 0.0-1.0-2.0-3.0 2005 2007 2009 2011 2013 2015 Sources: Bureau of Economic Analysis and Consensus Forecasts.
Household Wealth $ Billions 50,000 45,000 40,000 35,000 Mutual Funds 30,000 25,000 Corporate Equities 20,000 15,000 Real Estate 10,000 5,000 0 3Q 2000 3Q 2002 3Q 2004 3Q 2006 3Q 2008 3Q 2010 3Q 2012 3Q 2014 Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B100) (Not Seasonally Adjusted).
Household Debt Burden Percent of Disposable Income DSR 15.0 14.0 13.0 12.0 11.0 10.0 Financial Obligations Ratio (R) Debt Service Ratio (L) FOR 19.0 18.5 18.0 17.5 17.0 16.5 16.0 15.5 15.0 14.5 9.0 14.0 Q3 94 Q3 96 Q3 98 Q3 00 Q3 02 Q3 04 Q3 06 Q3 08 Q3 10 Q3 12 Q3 14 Source: Federal Reserve, Household Debt Service and Obligations Ratios.
Index of Consumer Confidence 1985=100 160 140 Recession 8 months Mountain Region Recession 8 months Recession 18 months 120 100 80 60 United States 40 20 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 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 YOY, Percentage Change 15.0 20,000 10.0 15,000 10,000 5.0 0.0-5.0 5,000-10.0 0 2004 2006 2008 2010 2012 2014-15.0 2004 2006 2008 2010 2012 2014 Sources: Seasonally Adjusted Annual Rate, Autodata Corp., Motor Intelligence, U.S. Census Bureau.
Nominal Corporate Profits and U.S. Business Fixed Investment Percent Change 30.0 Nominal Pre-Tax Corporate Profits Percent Change 10.0 Business Fixed Investment 25.0 20.0 5.0 6.3% 5.8% 15.0 10.0 7.4% 0.0 5.0 0.0-5.0 0.2% -5.0-10.0-10.0-15.0-15.0-20.0 2003 2005 2007 2009 2011 2013 2015-20.0 2003 2005 2007 2009 2011 2013 2015 Sources: Bureau of Economic Analysis, Consensus Forecasts.
ISM Indices 70 ISM Manufacturing Index 70 ISM Non-Manufacturing Index 65 65 60 60 55 55 50 50 45 45 40 40 35 35 30 2002 2004 2006 2008 2010 2012 2014 30 2002 2004 2006 2008 2010 2012 2014 Source: Institute for Supply Management (ISM).
Housing Affordability Index Composite Index 220 180 140 100 60 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: National Association of Realtors.
S&P/Case-Shiller Home Price Indices 1-year Home Price Change, November 2014 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Percent Change Cleveland Minneapolis New York Washington Phoenix Chicago Detroit Charlotte Boston San Diego Atlanta Los Angeles Seattle Portland Tampa Denver Dallas Las Vegas Miami San Francisco Source: Standard & Poor s (Not Seasonally Adjusted).
National FHFA Home Price Growth Year over Year Q3 2014 Source: Federal Housing Finance Agency Home Price Index, All Transactions Index.
National Housing Starts Millions 2.5 2.0 1.5 1.0 1 1.2 0.5 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: U.S. Census Bureau and Consensus Forecasts.
Money, Interest Rates, Prices, and Finance
Interest Rates Percent 7.0 6.0 5.0 Interest Rates, 2000-2014 10-Year T-Note 4.0 3.0 2.0 3-Month T-Bill 1.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: U.S. Treasury.
Summary Global output and trade growth modest Value of the dollar strengthening GDP growth accelerates Fiscal tightening Housing continues to recover Balance sheets getting stronger Consumers active Business investment grows Inflation and interest rates remain low
The Colorado Economy
Colorado Employment Growth Jobs Added Thousands 100 80 61.3 60 40 20 0-20 -40-60 -80-100 -120 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: Colorado Department of Labor and Employment, BEOF Committee Members.
Employment Change 2014-2015 Professional and Business Services Leisure and Hospitality Education and Health Services Trade, Transportation, and Utilities Construction Government Financial Activities Natural Resources and Mining Manufacturing Other Services Information 0 2 4 6 8 10 12 14 Thousands of Jobs
Employment Change 2013-2014 Employment in Thousands 2,480 2,470 2,460 2,450 2,440 2,430 EHS Const Govt Mfg PBS Mining Total jobs gained: 65,000 TTU Finance Info Other 2014 Net change: 62,300 Total jobs lost: 2,700 2,420 L&H 2,410 2013 2,400 Source: Bureau of Labor Statistics, Current Employment Statistics (NSA).
Colorado Employment Months to Recovery Colorado Employment Months to Recovery Percent 5.0 4.0 3.0 January 2008-September 2014 2.0 1.0 0.0-1.0-2.0 January 2001-May 2007-3.0-4.0-5.0-6.0-7.0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 Number of Months Since Peak Source: Bureau of Labor Statistics (Seasonally Adjusted).
Employment Recovery National, State, and Local Percent 20.0 15.0 10.0 5.0 0.0-5.0-10.0 Greeley Ft. Collins-Loveland Denver Boulder Colorado Pueblo National Colorado Springs Grand Junction -15.0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 Number of Months Since Peak Source: Bureau of Labor Statistics (Seasonally Adjusted).
Employment and Unemployment By MSA % Growth 2014 Employment Growth 1 Year Avg. YoY by MSA (SA) Greeley State 2.6% % Growth Greeley Unemployment Rate By MSA December 2014 (NSA) State 4% (NSA), 4% SA) Denver-Aurora-Broomfield Boulder Fort Collins-Loveland Pueblo Colorado Springs Grand Junction Denver-Aurora- Broomfield Boulder Fort Collins- Loveland Pueblo Colorado Springs Grand Junction -2% 0% 2% 4% 6% 0% 2% 4% 6% Source: Bureau of Labor Statistics.
Colorado Per Capita Personal Income By MSA, 2013 Boulder Colorado $46,897 United States $44,765 Denver-Aurora-Broomfield Fort Collins-Loveland Colorado Springs Grand Junction Pueblo Greeley $20,000 $30,000 $40,000 $50,000 $60,000 Source: Bureau of Economic Analysis, 2013 annual data.
Construction
Federal Housing Finance Agency Home Price Index Federal Housing Finance Agency Home Prices by MSA Q3 2013 Q3 2014 Denver-Aurora- Lakewood Boulder Fort Collins Greeley Colorado Springs Grand Junction Pueblo Colorado 8.7% -1.0 1.0 3.0 5.0 7.0 9.0 11.0 Percent Federal Housing Finance Agency Home Prices by MSA CAGR Q3 2004 Q3 2014 Denver-Aurora-Lakewood Boulder Fort Collins Greeley Colorado Springs Grand Junction Pueblo Colorado 1.8-1.0 0.0 1.0 2.0 3.0 Percent Source: Federal Housing Finance Agency, All Transactions Indexes.
Residential Building Permits 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Residential Building Permits 2006-2015 Multifamily Single Family 32,000 Impacted by: Household formation Mortgage interest rates Construction defects law Demographics 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: U.S. Census Bureau and Colorado Business Economic Outlook Committee.
Value of Construction $ Millions 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Nonbuilding Nonresidential Residential $13.4 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: McGraw-Hill Construction Dodge Research and Analytics and Colorado Business Economic Outlook Committee.
Retail Trade Sales Colorado Taxable Retail Sales 12-Month Rolling Sum 12-Month Rolling Sum, $ Millions 90 85 80 Percent Change 10.0 5.0 Colorado Retail Trade Sales 2006-2015 Nominal Growth 7.0 75 0.0 70 65-5.0 60 Real Growth 55-10.0 50-15.0 2006 2008 2010 2012 2014 Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.
Colorado General Fund Gross Revenue (excluding reserves, diversions, and transfers) $ Millions $10,500 $10,000 $9,500 $9,000 $8,500 General Fund Projections December 2014 September 2014 June 2014 Sept 2013 June 2013 March 2013 Mar 2014 Dec 2013 December 2012 $ Millions $11,400 $10,800 $10,200 $9,600 $9,000 $8,400 $7,800 $7,200 Colorado General Fund $6,600 $8,000 FY2012-13 FY2013-14 FY2014-15 FY 2015-16 $6,000 FY 2007 FY 2009 FY 2011 FY 2013 FY 2015 FY 2017 Source: Colorado Office of State Budgeting and Planning, excluding reserves, diversions, and transfers, December 2014.
Colorado Employment Growth Jobs Added, 1991-2015 Thousands 100 50 0-50 Best years since 2000-100 -150 1991 1995 1999 2003 2007 2011 2015 Sources: Bureau of Economic Analysis, NIPA Table 3.18B, Consensus Forecasts.
State Summary Colorado outperforms nation in employment growth Growing population Strong in-migration Home prices rising slowly, steadily Falling unemployment Labor Force Pressures
U.S. and Colorado Economies Q1 2004 Q1 2015 Index (50=Neutral) 75 National and State Expectations 70 65 60 55 Colorado 50 45 40 35 United States 30 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
Employment and New Entity Filings Employment, thousands 2,500 12-month total new entity filings 105,000 2,450 2,400 2,350 2,300 2,250 2,200 Employment New Entity Filings 100,000 95,000 90,000 85,000 80,000 75,000 70,000 65,000 2,150 2007 2008 2009 2010 2011 2012 2013 2014 2015 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 Economic Indicators Year Consumer Price Inflation Percent Change Retail Sales Percent Change Personal Income Unemployment Rate Percent Change Employment 2012 a 1.94 5.50 6.28 7.83 2.40 2013 a 2.77 4.76 3.02 6.77 2.96 2014 p 2.75 9.16 5.38 5.26 2.71 2015 2.12 6.86 6.28 4.11 2.80 2016 2.23 6.90 7.13 4.50 3.22 2017 2.46 5.98 6.30 4.45 2.10 2018 2.60 4.20 5.08 4.46 1.22 2019 2.56 3.09 3.77 4.55 0.99 2020 2.48 2.97 3.57 4.56 1.18 a Historical data. p Preliminary. Note: Represents annual averages of the month to month growth rate.
Colorado Ranking Among Other States Metric 1-Year 3-Year 5-Year 10-Year Real GDP Growth 6 8 13 15 Employment Growth 4 4 8 10 Population Growth 3 4 4 7 Personal Income Growth 6 8 12 19 PCPI Growth 28 17 40 40 PCPI 17 16 12 11 Average Annual Pay Growth 43 27 28 31 Average Annual Pay 14 13 11 12 Unemployment Rate 26 29 18 36 Labor Force 22 16 20 9 FHFA Home Price Index 7 10 3 11 Data Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Federal Housing Finance Agency, and the Colorado State Demography Office. BRD calculations. Note: 1-year, 3-year, and 5-year are based on the compound annual growth rate.
Boulder County Courtesy of the Regents of the University of Colorado.
Boulder County Employment and Education, 2013 Other 59% Employment by Occupation Management 5% Bus. and financial operations 7% Computer and math 7% Architecture and engineering 4% Science 3% Education training 7% Arts and entertainment Healthcare 2% 5% Educational Attainment Adults over age 25 with a bachelor s degree or higher U.S. 29.6% Colorado 37.8% Boulder 58.5% Adults over age 25 with a high school diploma U.S. 86.6% Colorado 90.5% Boulder 93.0% Sources: Bureau of Labor Statistics, Quarterly Census of Employment and Wages; Census, 2013 American Community Survey 1-Year Estimates
Non-Ag Employment Boulder MSA Thousands 185.0 180.0 146 Months +9,500 jobs, 5.6% 175.0 55 Months 170.0 165.0 160.0 155.0 150.0 145.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Bureau of Labor Statistics, CES Data Series, SA.
Single Family v. Multifamily Permits Boulder MSA Permits 1,800 1,600 1,400 Multifamily Single Family 1,200 1,000 800 600 400 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sources: U.S. Census Bureau.
Median Price Homes Sold: Single Family vs. Number of Single Family Homes Sold - Boulder $ Number of Homes Sold 750,000 1,100 700,000 Boulder: $685k; 724 sales Broomfield: $357k; 385 sales 1,000 650,000 900 600,000 550,000 500,000 450,000 400,000 350,000 800 700 600 500 400 300,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 300 Source: Boulder Area Realtor Association. *Boulder refers to the City of Boulder.
Commercial Vacancy Rates: City of Boulder Percent 18 15 12 Office Warehouse Flex Retail 9 6 3 Q4 05 Q4 07 Q2 09 Q2 10 Q2 11 Q2 12 Q2 13 Q2 14 Source: Newmark Grubb Knight Frank.
Value of Construction Boulder County $ Thousands 1,400 1,200 1,000 Nonbuilding Nonresidential Residential 800 600 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sources: McGraw-Hill Construction Dodge Research and Analytics.
Retail Sales State Collections Boulder County v. Colorado $ Billions 4.8 Boulder County Taxable Retail Sales, 12-Month Rolling Sum, 2005-2014 Indexed 145 Taxable Retail Sales 4.6 4.4 4.2 4.0 3.8 3.6 140 135 130 125 120 115 110 Boulder County Colorado 3.4 105 3.2 100 Source: Colorado Department of Revenue.
Concerns Global Growth Fed exit Strength of the dollar Median family income Political gridlock Availability of labor Availability/Cost of space Cost of housing Price of oil