Forecast: State should add 35,000 jobs in 2013
"The recovery has been painful as I think we all know," said Tom Binnings, senior partner at Summit Economics in Colorado Springs.
Binnings was one of several speakers who issued their predictions for this year to an audience of more than 460 people at the Business Report's 2013 Economic Forecast at the University of Northern Colorado. Speakers prognosticated on the banking, real estate, health care and energy industries in Northern Colorado.
Binnings said uncertainty would remain because of negotiations among lawmakers to deal with the national debt. Despite some advantages to health care reform, small businesses will struggle with the law as they make hiring decisions, he said.
Binnings said retail would struggle this year while sectors like homebuilding see improvements. In addition, a large influx of young, educated workers that have made their homes in Colorado will benefit the state's economy, Binnings said.
Community Banks of Colorado President Joe Bonner discussed the future of lending in 2013. Banks will likely begin lending more in the coming year, but should make sure to lend "prudently," Bonner said.
"It's time to get back to lending to the butcher, the baker and the candlestick maker," he said.
Banks are still dealing with uncertainty at the national level, but if banks handle their money properly, they'll be able to foster economic growth in a sustainable and responsible way, Bonner said.
Northern Colorado is fortunate because it benefits from a convergence of "some of the best economic fundamentals in the country," with both outside investment and population inflow bolstering the overall economy.
The real estate market should continue to improve, according to a presentation given by Realtec Commercial Real Estate's Michael Ehler.
Financing rates should remain favorable for real estate, providing an "excellent environment" for continued transaction activity.
Low vacancy rates and high rents will be seen not only in the multi-family sector, where vacancy rates have been below 5 percent all year, but also in retail space, particularly in Loveland's Centerra development and downtown Fort Collins, according to the presentation.
In Weld County, industrial space remains at a premium, so 2013 holds the potential for some new construction, if financing can be obtained. The third phase of Greeley's Leprino cheese plant is slated to open this year, creating jobs and boosting activity.
Many of the changes in the world of health care will come in 2014, according to Kaiser Permanente group president Donna Lynne.
Colorado remains the country's thinnest state, Lynne said, but is not the healthiest and has health care costs in the top one-third of the nation. As the Affordable Care Act comes into effect, more and more people will not receive their health insurance through their employers, Lynne said.
With the expansion of Medicaid in Colorado, 700,000 more people will be eligible for Medicaid or entered into new insurance exchanges.
With the Affordable Care Act, the Colorado health care market will feel "a lot of disruption," Lynne said.
The Denver-Julesburg Basin represents the "crown jewel" of Noble Energy Inc..'s acreage in the United States, said Greg Pachner, the Houston-based oil and gas company's director of domestic finance.
He predicted the Niobrara shale formation in the D.J. Basin will fuel a compounded annual growth rate of 20 percent through the next five years.
The company, which bills itself as the largest producer in Northern Colorado, has reserves of 2.1 billion barrels of oil-equivalent in the region, he said.
"It's a premier oil play that has outstanding well economics," he said.
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