Real Estate in Northern Colorado

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					      2009 Northern Colorado
        Economic Outlook
                  Martin Shields
                   David Keyser
             Colorado State University


This research is possible due to financial support from the Northern
Colorado Economic Development Corporation
                       2008 Was an Awful Year for
                            the US Economy
                      200

                      -300
 job loss (x 1000)




                      -800

                     -1300

                     -1800

                     -2300                                                                     S1




                                                                                         Nov
                                                     May
                                               Apr
                                         Mar




                                                                                   Oct
                                                                       Aug
                                                                             Sep
                             Jan
                                   Feb




                                                           Jun
                                                                 Jul

Source: Bureau of Labor Statistics
Another View
           Today’s Storyline
•   Last year wasn’t so bad in northern Colorado
•   Until the past few months
•   2009 is going to be rough
•   But the US recovery should begin by mid-summer
•   Policy makers: Plan for 3 years out, not just 3
    months
  Things Looked Pretty Darn Good
     Locally Until Late Summer
                                           Employment change over 12 months
 4.5%
 4.0%
 3.5%
 3.0%
 2.5%
 2.0%
 1.5%
 1.0%
 0.5%
 0.0%
        November




                                                               November




                                                                                                                     November




                                                                                                                                                                            November
                                                   September




                                                                                                         September




                                                                                                                                                                September
                                            July




                                                                                                  July




                                                                                                                                                         July
-0.5%
                   January




                                                                          January




                                                                                                                                January
                             March




                                                                                    March




                                                                                                                                          March
                                     May




                                                                                            May




                                                                                                                                                   May
                             2006                                                       2007                                                      2008
   Education and Government
     Continue to Add Jobs
                                    Education and Health Care
                                    Government
                                    Natural Resources, Mining
                                    Other Services
                                    Leisure and Hospitality
                                    Information
                                    Financial Activities
                                    Professional and Business Services
                                    Construction
                                    Manufacturing
                                    Trade, Transportation, and Utilities

-800 -600 -400 -200   0   200 400 600

     November 2007 to November 2008 Job Change
    Residential Construction
      Employment Down
          Employment Change: Jan-June 2006-08
                                                       Nonresidential Construction

                                                       Foundations, Structures and Exteriors

                                                       Utility Construction

                                                       Hwy, Streets & Bridges

                                                       Other Heavy and Civil Engineering Construction

                                                       Other Heavy Construction

                                                       Land Subdivision

                                                       Utility System Construction

                                                       Building Equipment Contractors

                                                       Residential Building Construction

-500 -400 -300 -200 -100   0   100   200   300   400

          Total Construction Jobs: 17,774. Down 426 (-2.4%)
It Could be Worse
Looking Ahead
 2009 Clouded by Uncertainty
• We are not immune to national problems
• But our diversified economy and
  educated workforce will help us weather
  the storm
• It’s not going to be painless
  – Unemployment will creep up
We Offered a Forecast in
      October…
Employment Growth Expected to
Remain less than 2%: 4,000 New
              Jobs
4.0%
                                                           Forecast
3.0%

2.0%

1.0%

0.0%
        2002   2003   2004 2005   2006   2007    2008   2009 2010     2011
-1.0%

-2.0%

-3.0%

                          Northern Colorado     Colorado
Employment Growth Expected to
Remain less than 2%: 4,000 New
              Jobs
4.0%
                                                           Forecast
3.0%

2.0%

1.0%

0.0%
        2002   2003   2004 2005   2006   2007    2008   2009 2010     2011
-1.0%

-2.0%

-3.0%

                          Northern Colorado     Colorado
Now We’re not So Sure
          Regional Economic
            Outlook 2009
• The unprecedented turmoil hampers our
  forecasting efforts, as our models don’t do a
  good job with human emotion
• For 2009 we expect a difficult first 6 months, but
  the national outlook should improve by the end
  of the 3rd quarter
• Northern Colorado, however, tends to lag the US
          Regional Economic
            Outlook 2009
• For the year, we forecast very little employment
  change from 2008
   – Health care and professional services remain
     bright spots
   – Retail and leisure slow substantially
   – Construction, real estate and finance will
     continue to struggle
   – Manufacturing is the wild card
Moving Forward
     A Federal Government
        Driven Recovery
•  Business and consumer pessimism will
   prolong the recession
• Lower interest rates should (finally) help the
   housing market
• And increased government spending can
   dampen the recessionary effects
• Two primary challenges to Mr. Obama
  1. Increase business investment
  2. Restore consumer confidence
  State and Local Implications
• There is great temptation to do something
  to spur jobs immediately
• But we need to think long term as well and
  maintain investment in core strengths
  – Recommit to education
  – Continue to build the new energy economy
  – Maintain and repair infrastructure (FASTER)
  – Enhance state support for entrepreneurism

				
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