Keynote Presentation -...

2014 Economic Forecast: Boulder & Beyond

Keynote Presentation

Business Research Division • Leeds School of Business • University of Colorado

Business Research Division

Richard Wobbekind

Executive Director

Business Research Division &

Senior Associate Dean Leeds School of Business

www.leeds.colorado.edu/brd

Business Research Division • Leeds School of Business • University of Colorado Sources: Bureau of Economic Analysis and December 2013 NABE Forecast.

Real GDP Growth

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Percent Quarterly and Annualized Real GDP 1990-2014

Quarterly GDP

Annualized GDP 1990-1999

Annualized GDP 2000-2009


Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and NABE Outlook December 2013.

National Employment

-900

-700

-500

-300

-100

100

300

500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thousands, Month-over-Month

Recession 18 Months

Recession 8 Months


National Employment Months to Recovery

Source: Bureau of Labor Statistics (Seasonally Adjusted).

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

0 6 12 18 24 30 36 42 48 54 60 66

Percent

Number of Months Since Peak

2008-Present

2001-05 1990-93

1981-83

1974-76 1980


-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

2005 2007 2009 2011 2013 2015

Percent Change

2.6% 2.8%

Personal Consumption

Sources: Bureau of Economic Analysis and Blue Chip Economic Forecasts.

U.S. Income and Consumption

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

2005 2007 2009 2011 2013 2015

Percent Change

Disposable Personal Income

2.6% 2.8%


Household Wealth

Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B100) (Not Seasonally Adjusted).

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

3Q2000

3Q2001

3Q2002

3Q2003

3Q2004

3Q2005

3Q2006

3Q2007

3Q2008

3Q2009

3Q2010

3Q2011

3Q2012

3Q2013

$ Billions

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

3Q2000

3Q2001

3Q2002

3Q2003

3Q2004

3Q2005

3Q2006

3Q2007

3Q2008

3Q2009

3Q2010

3Q2011

3Q2012

3Q2013

$ Billions

Real Estate

Corporate Equities

Mutual Funds


Household Debt Burden Percent of Disposable Income

Source: Federal Reserve, Household Debt Service and Obligations Ratios.

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

Q3 93 Q1 95 Q3 96 Q1 98 Q3 99 Q1 01 Q3 02 Q1 04 Q3 05 Q1 07 Q3 08 Q1 10 Q3 11 Q1 13

FOR DSR

Financial Obligations Ratio (R)

Debt Service Ratio (L)


0

20

40

60

80

100

120

140

160

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

1985=100 Recession 8 months

United States

Mountain Region

Index of Consumer Confidence

Recession 8 months

Recession 18 months

Sources: The Conference Board and National Bureau of Economic Research.


Vehicle Sales and Retail Sales

Sources: Seasonally Adjusted Annual Rate, Autodata Corp., Motor Intelligence, U.S. Census Bureau.

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

2003 2005 2007 2009 2011 2013

Retail Sales YOY, Percentage Change

0

5,000

10,000

15,000

20,000

25,000

2003 2005 2007 2009 2011 2013

Vehicle Sales Thousands, SAAR


Nominal Corporate Profits and U.S. Business Fixed Investment

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2003 2005 2007 2009 2011 2013 2015

Percent Change

Nominal Pre-Tax Corporate Profits

5.0% 5.3%

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

2003 2005 2007 2009 2011 2013 2015

Percent Change

Business Fixed Investment

5.2%

5.4%

Sources: Bureau of Economic Analysis and Blue Chip Economic Forecasts.


ISM Indices

Source: Institute for Supply Management (ISM).

30

35

40

45

50

55

60

65

70

2001 2003 2005 2007 2009 2011 2013

ISM Manufacturing Index

30

35

40

45

50

55

60

65

70

2001 2003 2005 2007 2009 2011 2013

ISM Non-Manufacturing Index


S&P/Case-Shiller Home Price Indices

Source: Standard & Poor’s (Not Seasonally Adjusted).

0% 5% 10% 15% 20% 25% 30%

New YorkBostonDenverDallasChicagoMinneapolisSeattleMiamiDetroitAtlantaSan FranciscoLas Vegas

1-year Home Price Change, December 2013

Percent Change


Housing Affordability Index

60

100

140

180

220

Jan-81 Jan-85 Jan-89 Jan-93 Jan-97 Jan-01 Jan-05 Jan-09 Jan-13

Composite Index

Source: National Association of Realtors.


National Housing Starts

Sources: U.S. Census Bureau, NABE Outlook December 2013, and the Colorado Business Economic Outlook Committee.

1.10

0.92

0.0

0.5

1.0

1.5

2.0

2.5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Millions


-1,600

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

2002 2004 2006 2008 2010 2012 2014

$ Billions

-$811 -$776

Sources: Bureau of Economic Analysis and Dismal.

Federal Budget Balance


-900

-800

-700

-600

-500

-400

-300

-200

-100

0

2006 2009 2012 2015

$ Billions Real Net Exports

-$410 -$418

Sources: Federal Reserve, Bureau of Economic Analysis, and Blue Chip Economic Forecasts.

U.S. Nominal Broad Dollar Index and Real Net Exports

90

95

100

105

110

115

120

125

2004 2006 2008 2010 2012 2014

1973=100 U.S. Nominal Broad Dollar Index


Money, Interest Rates, Prices, and Finance


Interest Rates

Source: U.S. Treasury.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Interest Rates, 2000-2014 Percent

10-Year T-Note

3-Month T-Bill


-1.0-0.50.00.51.01.52.02.53.03.54.04.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Percent CPI Percent Change, 2004-2014

Denver- Boulder- Greeley

United States

2.1%

Sources: Bureau of Labor Statistics and Colorado Business Economic Outlook Committee.

Consumer Price Index All Items


• GDP growing as the year progresses

• Housing in recovery • Balance sheets getting stronger

• Consumers stay in the marketplace

• Business investment grows

• Fiscal drag (slower growth of G) continues

but is a smaller issue • Tapering continues with modest impact on long

term rates • Inflation low and stable

U.S. Summary


The Colorado Economy


Source: Colorado Demography Office.

• Among top 7 states for percentage growth

• 9th fastest for absolute growth

• 22nd- most population in U.S.

• Continued net migration into the state

• 83% of population in 12 Front Range counties

Change in Population

0

10

20

30

40

50

60

70

80

90

100

2004 2006 2008 2010 2012 2014

Thousands Change in Colorado Population

2004-2014


Colorado Employment Workers Added 2002-2013

Sources: Colorado Department of Labor and Employment and Colorado Business Economic Outlook Committee.

61.3

-120

-100

-80

-60

-40

-20

0

20

40

60

80

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thousands


Employment Change 2013-2014

Source: Bureau of Labor Statistics, Current Employment Statistics (NSA).

2013

PBS

Const

TTU

EHS

L&H

Govt Finance Other Mfg Mining Info 2014

2,370

2,380

2,390

2,400

2,410

2,420

2,430

2,440

2,450

Total jobs gained: 61,600

Total jobs lost: 300

Net change: 61,300

Employment in Thousands


Employment Recovery National, State, and Local

-7.0-6.0-5.0-4.0-3.0-2.0-1.00.01.02.03.0

0 6 12 18 24 30 36 42 48 54 60 66

Percent


Employment Recovery: National, State, and Local

US

Colorado Denver and Boulder MSAs



Regional Employment Growth and Unemployment

0.0 2.0 4.0 6.0 8.0 10.0

Colorado Springs

Fort Collins-Loveland

Grand Junction

Pueblo

Boulder

Denver-Aurora-Broomfield

Greeley

Percentage

Unemployment Rate November 2013

Colorado 5.9% NSA, 6.2% SA

Sources: CES (Seasonally Adjusted) and LAUS (Not Seasonally Adjusted).

0.0 1.0 2.0 3.0 4.0 5.0

Colorado Springs


Grand Junction

Pueblo

Boulder


Greeley

Percentage

Employment Growth Rate, December 2013 YoY

Colorado 1.9%


-1.0% 0.0% 1.0% 2.0% 3.0% 4.0%

(51) District of Columbia

(50) Maine

(49) New Mexico

(47) New Hampshire

(48) Washington

(6) Colorado

(5) South Carolina

(4) Florida

(3) Texas

(2) Arizona

(1) North Dakota

2014

The Top 5 vs. The Bottom 5 States Jobs Added in 2013 and 2014 Forecast

Source: Moody’s Economy.com

-1.0% 0.0% 1.0% 2.0% 3.0% 4.0%

(51) District of Columbia

(49) Maine

(50) Illinois

(47) Louisiana

(48) Wyoming

(5) Georgia

(4)Florida

(3) Colorado

(2) Texas

(1) Arizona

2015


Colorado Per Capita Personal Income By MSA (2012)

$10,000 $20,000 $30,000 $40,000 $50,000 $60,000

Greeley

Pueblo

Grand Junction


Colorado Springs


Boulder

Colorado $45,775

Source: Bureau of Economic Analysis, 2012 annual data.

United States $43,735


Colorado Total Nonfarm Wages 4Q Rolling Sum

Source : Bureau of Labor Statistics, QCEW.

70

75

80

85

90

95

100

105

110

115

120

Q2 2002 Q2 2004 Q2 2006 Q2 2008 Q2 2010 Q2 2012

$ Billions


Construction

Photo

Cou

rtesy

www

.rtd-

fastra

cks.c

om


Federal Housing Finance Agency (FHFA) House Price Index

Source: Federal Housing Finance Agency, All Transactions Indexes.

-1.0 1.0 3.0 5.0 7.0 9.0 11.0

Pueblo

Grand Junction

Colorado Springs


Greeley

Boulder


Percent

Colorado 7.8%

Federal Housing Finance Agency Home Prices by MSA

Q3 2012 – Q3 2013

-1.0 0.0 1.0 2.0 3.0

Pueblo

Grand Junction

Colorado Springs


Greeley

Boulder


Percent

Colorado 1.4%

Federal Housing Finance Agency Home Prices by MSA

CAGR Q3 2003 – Q3 2013


Residential Building Permits

Sources: U.S. Census Bureau and Colorado Business Economic Outlook Committee.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Residential Building Permits 2005-2014

Multifamily

Single Family

33,500


Value of Construction Colorado

Sources: McGraw-Hill Construction Dodge Research and Analytics and Colorado Business Economic Outlook Committee.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Millions

Nonbuilding

Residential

$15.1 B

Nonresidential


Retail Trade Sales

Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.

50

55

60

65

70

75

80

2001 2003 2005 2007 2009 2011 2013

Colorado Taxable Retail Sales 12-Month Rolling Sum

12-Month Rolling Sum, $ Millions

5.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

2005 2008 2011 2014

Percent Change

Nominal Growth

Real Growth

Colorado Retail Trade Sales 2005-2014


Colorado General Fund Gross Revenue (excluding reserves, diversions, and transfers)

Source: Colorado Office of State Budgeting and Planning, excluding reserves, diversions, and transfers, June 2013.

$7,000

$7,500

$8,000

$8,500

$9,000

$9,500

$10,000$ Millions

General Fund Projections

September 2013

September 2012 December 2012

December 2011

$6,400

$6,900

$7,400

$7,900

$8,400

$8,900

$9,400

$9,900

$10,400

FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

FY2012

FY2013

FY2014

FY2015

$ Millions Colorado General Fund

December 2013


• Colorado outperforms nation in employment growth

• Weather a factor for Ag and Tourism

• Home prices rising slowly, steadily

• Growing population

• Broad based employment growth

• Falling unemployment

State Factors


U.S. and Colorado Economies Q1 2004 – Q1 2013

25

30

35

40

45

50

55

60

65

70

75

Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014

National and State Expectations

Colorado

United States

Index (50=Neutral)


Employment and New Entity Filings

60,000

66,000

72,000

78,000

84,000

90,000

2,150

2,200

2,250

2,300

2,350

2,400

2006 2007 2008 2009 2010 2011 2012 2013 2014

Employment, thousands 12-month total new entity filings

New Entity Filings

Employment

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.


Colorado Economic Indicators

Year Consumer

Price Inflation

Percent Change

Retail Sales

Percent Change Personal Income

Unemployment Rate

Percent Change

Employment

2011a 3.69 7.69 6.05 8.93 1.62

2012a 1.94 5.50 3.87 8.08 2.27

2013 2.65 4.20 3.65 7.48 2.38

2014 2.24 6.60 5.94 7.11 2.21

2015 2.24 6.50 7.28 6.51 3.24

2016 2.31 4.80 6.32 5.91 2.95

2017 2.38 3.91 4.90 5.56 1.83

2018 2.35 3.03 3.95 5.60 1.03

2019 2.24 2.62 3.57 5.63 0.98 aHistorical data.


The Boulder Economy


Boulder Employment

150.0

155.0

160.0

165.0

170.0

175.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Thousands Boulder Employment, 2000-2013

89 Months 53 Months

Sources: Bureau of Labor Statistics, Current Employment Statistics (Seasonally Adjusted).


Months to Recovery Employment Change By MSA

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70

Percent


Pueblo


Boulder Fort Collins-Loveland



Boulder County Employment and Wages, 2012

Manufacturing 14%

Retail trade 5%

Healthcare and social assistance

10%

Information 10%

Government 15%

Prof. Tech. Services

28%

Other 19%

Wages by Industry Manufacturing

10%

Retail trade 10%

Healthcare and social assistance

12%

Information 5%

Government 16%

Prof. Tech. Services

19%

Other 27%

Employment by Industry

Sources: Bureau of Labor Statistics, Quarterly Census of Employment and Wages.


Boulder County Wages

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

2,400

2,500

Q1 2003 Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013

$ Millions Boulder County Wages, Quarterly,

2003-2013

6,500

7,000

7,500

8,000

8,500

9,000

9,500

Q1 2003 Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013

$ Millions Boulder County Wages,

Annual Rolling Sum, 2003-2013



Boulder County Employment and Education, 2012

Management 5%

Bus. and financial

operations 7% Computer and

math 7%

Architecture and

engineering 4%

Science 3% Education

training 7%

Arts and entertainment

2% Healthcare 5%

Other 60%

Employment by Occupation


Educational Attainment

Adults over age 25 with a bachelor’s degree or higher

• U.S. 29.1% • Colorado 37.5% • Boulder 57.9%

Adults over age 25 with a high school diploma

• U.S. 86.4% • Colorado 90.6% • Boulder 94.5%


Retail Sales – State Collections Boulder County v. Colorado

Source: Colorado Department of Revenue.

3.2

3.4

3.6

3.8

4.0

4.2

4.4

4.6

Boulder County Taxable Retail Sales, 12-Month Rolling Sum, 2005-2013 $ Billions

100

105

110

115

120

125

130

135

140Taxable Retail Sales

Colorado

Boulder County

Indexed


Boulder County Value of Construction

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$ Thousands Value of Construction, Colorado

2003-2013

Nonbuilding

Residential Nonresidential

0

200

400

600

800

1,000

1,200

2012 2013

December YTD 2012-2013

$ Thousands

Sources: McGraw-Hill Construction Dodge Research and Analytics.


Boulder County Building Permits

0

100

200

300

400

500

600

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$ Millions Number of units

Source: U.S. Census Bureau, Building Permits Survey.


Commercial Vacancy Rates: City of Boulder

Source: Newmark Grubb Knight Frank.

3

6

9

12

15

18

Q4 05

Q4 07

Q2 09

Q2 10

Q2 11

Q2 12

Q2 13

OfficeWarehouseFlexRetail

Percent


Median Price Homes Sold: Single Family vs. Number of Single Family Homes Sold - Boulder

300

400

500

600

700

800

900

1,000

1,100

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*

Number of Homes Sold

Source: Boulder Area Realtor Association. *YoY through November 2013.


Boulder Venture Capital Investment

Source: PwC/NVCA MoneyTree, Boulder County Business Report.

Boulder VC Industry Allocation

IT Services 41.5% Software – 49.8%

Retailing/Distribution 1.2%

$0$20$40$60$80

$100$120$140$160$180$200

Q1 07

Q3 07

Q1 08

Q3 08

Q1 09

Q3 09

Q1 10

Q3 10

Q1 11

Q3 11

Q1 12

Q3 12

Q1 13

Q3 20

13

Boulder Quarterly VC Funding (In Millions)


• Most educated community in U.S. (BLS)

• Highest high-tech startup density in

U.S. (Kauffman)

• Highest ranked “creative class”

community in U.S. (Florida)

• 2nd highest concentration of high-tech

employment in U.S. (BLS)

• 9th best performing city in the US 2013

(Milken Institute)

• Startup/entrepreneurial accolades from

Inc., BusinessWeek, Forbes, NY Times

• Foodiest, happiest, healthiest!

Boulder

https://www.google.com/imgres?imgurl&imgrefurl=http://www.boulderdowntown.com/&h=0&w=0&sz=1&tbnid=eKat6-WSh3S2qM&tbnh=136&tbnw=371&zoom=1&docid=54jipjjPMBMM8M&hl=en&ei=92vpUozsC6ibygHVqYGoDQ&ved=0CAIQsCUoAA


Thank you


Manufacturing Employment

50

60

70

80

90

100

110

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Jan 2001=100

U.S.

Boulder

Colorado

Sources: Bureau of Labor Statistics, Current Employment Statistics (NSA).


Manufacturing GDP Index

50

70

90

110

130

150

170

190

210

230

250

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2001 = 100

U.S.

Colorado

Boulder

Source: Bureau of Economic Analysis , Chained Dollars.


Professional, Scientific, and Technical Services Employment

50

70

90

110

130

150

170

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Jan 2000=100

U.S.

Boulder

Colorado



Professional, Scientific, and Technical Services GDP Index

5060708090

100110120130140150

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2001 = 100

U.S.

Colorado

Boulder

Source: Bureau of Economic Analysis, Real GDP, Chained Dollars.


Information Employment

50

60

70

80

90

100

110

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Jan 2001=100

U.S.

Boulder Colorado



Information GDP Index

5060708090

100110120130140150160170180

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2001 = 100

U.S.

Colorado Boulder

Source: Bureau of Economic Analysis, Chained Dollars.


80

90

100

110

120

130

140

150

160

U.S. Boulder

Colorado

Education and Health Services Employment


Jan 2001=100


Education and Health Services GDP Index

50

60

70

80

90

100

110

120

130

140

150

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2001=100

U.S.

Source: Bureau of Economic Analysis, Chained Dollars.

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