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Economists issue rosy forecast at forum

Oil price drop may hurt state’s job picture
Economist Richard Wobbekind from the University of Colorado Boulder has spoken at each of the 23 Southwest Business Forums held at Fort Lewis College, including the forum held Wednesday morning.

The national, state and local economic outlook is generally positive, although there are some clouds on the horizon, economists said at the Southwest Business Forum held Wednesday at Fort Lewis College.

Tim Quinlan, a Wells Fargo economist, predicted 3.1 percent growth in real gross domestic product for the United States.

Colorado and La Plata County have experienced strong growth in population and employment.

“Clearly, the state has grown even more rapidly than we thought it was going to grow,” said Richard Wobbekind, executive director of the Business Research Division at the University of Colorado at Boulder.

The forum was held for the 23rd year at Fort Lewis. Wobbekind has spoken at every forum since its inception.

Robert “Tino” Sonora, a Fort Lewis economist, forecast unemployment would fall to 3.5 percent in La Plata County in 2015, down from a little more than 4 percent last year.

The economists tempered the generally positive outlook with a few caveats. Sonora said some analysts expect U.S. housing prices to fall this year. Also, the effects of cheap crude oil – now less than $50 a barrel – are uncertain, and could cost jobs in areas with a strong energy-industry presence.

Locally, Mesa Verde National Park welcomed 505,989 visitors in 2014, the most since 2011. Ridership on the Durango & Silverton Narrow Gauge Railroad also has bounced back, Sonora said.

Local bank deposits are down, he said. Enrollment at FLC also has fallen to about 3,700 students this school year, down from more than 4,000 in fall 2013.

Oil prices are a big wildcard for the 2015 economy. Crude oil has fallen from more than $100 a barrel in June to less than $50 by Wednesday for West Texas Intermediate.

The fall in oil prices is leaving more money in consumers’ wallets – the average gasoline price in Durango fell to $2.301 per gallon Wednesday, down 27 percent from $3.17 a year ago.

The economic downside is that drillers are already pulling back in areas where they have provided hundreds of high-paying jobs.

“We’d be foolish not to have some concerns about what the effects of the falling price of oil might be,” said Wobbekind. Weld County and the Fort Collins area particularly have benefitted from oil production, he said.

Colorado is the nation’s eighth-largest oil producer, sixth-largest natural-gas producer and 11th-largest coal producer, Wobbekind said.

“I think you’d have to argue Colorado has become a major energy state,” he said.

cslothower@durangoherald.com



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