As locals ring in the New Year today with resolutions and moments of wonder about what the coming year might hold, jobs and the economy will weigh heavy on the minds of some.
That’s because economic health and prosperity play important roles in residents’ daily lives. And the bigger pictures of both concepts “all starts with a job,” said one state-based report predicting how Colorado’s economy will fare this year.
But predictions are just that, the report said.
“In the end, the only certainty is that (forecasts) will either be wrong or lucky,” the Colorado-based Business and Economic Research, or CBER, forecast for 2012 said. “Either way, the value of the forecast is not in the numbers, but in the forecast story.”
There are a few speculative stories officials around the state are likely to lean on as the year progresses. They don’t all agree about what might be ahead in the state and local economies.
The CBER report predicts expansion of global domestic product, or GDP, and a faster rate of employment growth in Colorado for 2012. The Governor’s Office of State Planning and Budget, however, predicts slower growth in jobs and output than occurred in 2011. And the Colorado Legislative Council splits the difference with a prediction that GDP will grow faster this year but the addition of jobs in Colorado will slow.
While forward-looking predictions for the economic climate in Colorado this year are conflicting, the gap between the state’s most optimistic and pessimistic forecasts are smaller this year than in 2011, said Gary Horvath, a longtime Colorado business, economic and market researcher who contributes to numerous official reports produced by state agencies.
“A most likely scenario points to the addition of 27,500 to 37,500 jobs,” Horvath said.
Numerous factors could affect the economy in Colorado and the nation this year, leaving margins of uncertainty in the reports, the CBER report said. Among the factors that could change the economic course for the state and nation are whether job predictions truly materialize; if incomes improve and people begin buying more goods and services; and how Europe overcomes its debt crisis and recession. The Conference Board, an international independent business research organization, believes Europe is now in a recession.
“The global and U.S. economy is fragile,” the CBER report said. “A decrease in European demand could lower the rate of U.S. GDP growth and the strength of our economy.”
The long, dark tunnel of recession has a light now, though, The Conference Board reports.
Just a few months ago, the organization estimated the United States had more than a 50 percent chance of slipping into a double-dip recession. The organization now assesses that risk at just 9 percent.
“At the moment it appears that the U.S. has avoided a recession,” the CBER report said.
The report predicts national unemployment rates this year will run in the range of 8.3 to 8.8 percent.
In Colorado, the job market has improved, some goods-producing sectors such as manufacturing and the oil and natural-gas industries are expanding, and businesses around the state say they’re feeling more optimistic about the future, the Governor’s Office of State Planning and Budgeting said.
“In certain important aspects, Colorado’s economy is outperforming the nation in the rebuilding process,” said the agency’s 2012 outlook report, which was released late last month.
A 2011 CNBC ranking placed Colorado in the top five states for business. And preliminary estimates of the official numbers expected to be released in March indicate about 27,000 new jobs were added here in 2011. The Governor’s Office said job growth appears to have sustained momentum, and that bodes well for 2012.
At least 200,000 Coloradans, more than three times the number in 2001, remain unemployed, however, the CBER report said.
In the five-county southwestern region that includes La Plata County, which the Colorado Legislative Council reports was hit especially hard by the recession, spending is “picking up” and unemployment is falling despite increases in the labor force itself.
Jack Llewellyn, director of the Durango Chamber of Commerce, predicted the good employment and spending news in Southwest Colorado would be observed this year.
Llewellyn said the local retail industry and sales-tax revenues are expected to make slow but steady improvements in 2012. The tourism market also should see similar improvements, he said.
“We are still considered an affordable destination for vacations,” Llewellyn said, which means La Plata County will continue to draw vacationers from the surrounding areas within driving distance.
Robert Sonora, a Fort Lewis College economics professor, concurred that 2012 will be better. But he added the prediction comes with caution.
People are spending more these days, Sonora said, but they’re saving less. It means people either are using their savings to spend or spending money they otherwise would be saving, which could come with its own economic price over time.
Still, Sonora said, “I think we’ll see some (economic) improvement in 2012.”