major trends impacting colorado’s future today and tomorrow

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Major Trends Impacting Colorado’s Future Today and Tomorrow

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Major Trends Impacting Colorado’s Future Today and Tomorrow. Colorado Economy Today. Colorado’s recession ended in 2009. 2012 and 2013, job growth beat projections by every economist. 2014 continues the trend. - PowerPoint PPT Presentation

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Page 1: Major Trends Impacting Colorado’s Future Today and Tomorrow

Major Trends Impacting Colorado’s Future Today and Tomorrow

Page 2: Major Trends Impacting Colorado’s Future Today and Tomorrow

Colorado Economy Today

• Colorado’s recession ended in 2009.• 2012 and 2013, job growth beat projections by every

economist. 2014 continues the trend.• Colorado’s highly diversified economy (4th best in the

U.S.) cushioned the recession’s blow – especially in housing values.

• Growth is progressing at all levels across the State’s economic base, but growth in geographic areas is not equal.

• Lay-offs are half of lay-offs in 2008

Page 3: Major Trends Impacting Colorado’s Future Today and Tomorrow

The Depth of the Great Recession

• 2001 – 2010 “establishments” created “net zero” jobs. But job growth increased by 130,000 jobs. More about this later.

• Number Employed Metro (2005): 1.440 million

• Total Number Employed (2013): 1.463 million

• This was truly The Great Recession

Page 4: Major Trends Impacting Colorado’s Future Today and Tomorrow

Growth Up, Up, Up…

• State jobs up 2.6% Metro up 2.7%. Led by construction and natural resources. Expect 3% growth rate by year end. Haven’t seen numbers like this since the late 1990s.

• Exports up 6%. Could reach record of $8.6 billion by year end.

• Leeds Business Confidence Index is 60.5 up from 58.1

Page 5: Major Trends Impacting Colorado’s Future Today and Tomorrow

Colorado Per Capita Personal Income

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$33,986

$41,181

$44,180 $45,135 Colorado United States

Colorado has 13th Highest Per Capita Personal Income Level

Source: U.S. Bureau of Economic Analysis.

Page 6: Major Trends Impacting Colorado’s Future Today and Tomorrow

Nonfarm Job Growth Rates

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e-6%

-4%

-2%

0%

2%

4%

6%

1.1% 1.7% 1.9%0.8%

3.5%2.9%

United States Metro Denver

Metro Denver 2013 Employment = 1.5 million68K jobs lost 2009-2010; 64K jobs added 2011-2012; 49K jobs added 2013

Source: U.S. Bureau of Labor Statistics.

Page 7: Major Trends Impacting Colorado’s Future Today and Tomorrow

International Trends

Uncertainty in Every Corner• Putin holding Western Europe hostage with

natural gas.• Crimea, Syria, Libya and Iraq all caught up in

civil war. Libya and Iraq had been significant oil suppliers to U.S. in recent years.

• China and Japan conflict over northern Japanese Islands.

• International refugee crisis

Page 8: Major Trends Impacting Colorado’s Future Today and Tomorrow

International Trends

• Colorado now a global competitor – direct flights to Europe, Asia and Panama (December, 2014) now connect Colorado to 65% of Gross World Product in the “Global Triangle”.

• Huge global consumer market will seem to “explode” in tourism and trade, as China alone adds 300 million to the middle class in next 10 years.

• Japan will begin to off-shore its manufacturing over the next five years as it emerging from twelve year recession. U.S. and Brazil will benefit.

Page 9: Major Trends Impacting Colorado’s Future Today and Tomorrow

The Prospect of American Energy Independence

• Colorado ranks 5th in U.S. for natural gas production and 10th in oil production

• U.S. is preparing to launch a major infrastructure initiative that would permit the export of liquefied natural gas (LNG).

• “Re-shoring” of manufacturing will result as low cost gas will increase our competitiveness

Page 10: Major Trends Impacting Colorado’s Future Today and Tomorrow

U.S. will be world’s largest oil producer by 2020

• Reliable oil prices – over 80% of U.S. oil demand will come from domestic sources or trusted allies – Canada and Mexico.

• Balance of payments will improve, strengthening dollar, increasing domestic investments.

• Western Europe and Asia (Japan and China) will increase direct investments in U.S. as Russia’s grip on oil and gas costs throughout Europe will discourage expansions due to higher production costs.

Page 11: Major Trends Impacting Colorado’s Future Today and Tomorrow

Fig. 14

1.0 Trillion Barrels of

Oil

Page 12: Major Trends Impacting Colorado’s Future Today and Tomorrow

U.S. Russia Qatar Iran Canada Norway China Saudi Arabia0

5,000

10,000

15,000

20,000

25,000

30,000

Natural Gas Production Leaders, 2008-2012U.S. is 1st and growing; top 8 producers

equal 62.0% of global production2008

2009

2010

2011

2012

Tri

llion

Cu

bic

Feet

(T

cf)

Source: International Energy Agency

U.S. ranks 1stwith 19.8% of

global production24.05 (Tcf)

Fig. 16

Page 13: Major Trends Impacting Colorado’s Future Today and Tomorrow

TX LA PA WY OK CO AR NM WV UT0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Natural Gas Production by State, 2008-2012

Colorado ranks 6th in production; pro-duction is increasing

due to technology improvements 2008

2009

2010

2011

2012

Tri

llion

Cu

bic

Feet

(T

cf)

Source: U.S. Department of Energy, Energy Information AdministrationNote: Top ten producers including Colorado

CO ranks 6thin production

1.6 (Tcf)

Fig. 10

Page 14: Major Trends Impacting Colorado’s Future Today and Tomorrow

19731975

19771979

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

0

5,000

10,000

15,000

20,000

25,000

U.S. Crude Oil Production & Consumption, 1973-2012Gap is narrowing; domestic production increasing

since 2009; domestic consumption decreasing since 2006

U.S. Production

U.S. Consumption

Mil

lion

Bar

rels

per

Day

Source: U.S. Department of Energy, Energy Information AdministrationFig. 6

Page 15: Major Trends Impacting Colorado’s Future Today and Tomorrow

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Renewables

Hydro

Nuclear

Natural Gas

Oil

Coal

% o

f Gen

erat

ion

Source: U.S Department of Energy, Energy Information Administration; some 2012 data is provisional

U.S. Net Generation History by Resource, 1950-2012

Fig. 33

Page 16: Major Trends Impacting Colorado’s Future Today and Tomorrow

Partnership between Natural Gas and Renewable Energies

• Natural gas produces 40% less carbon dioxide than other fossil sources.

• “Ramp up” time for natural gas electrical generation is generally faster than older coal plants. This “quick on” advantage allows gas to supplement drops in wind speeds for turbines or weather changes for solar fields.

Page 17: Major Trends Impacting Colorado’s Future Today and Tomorrow

China U.S. European Union

India Russia Japan Germany Iran South Korea Canada0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

25%

16%

11%

6%5%

3%

2% 2% 2%1%

CO₂ Emissions by Country: 2000, 2005, 2010

Top ten countries account for 64% of world CO₂ emissions 2000

2005

2010

CO E

mis

sion

s (b

illi

on m

etri

c to

ns)

Source: World Bank; Carbon Dioxide Information Analysis Center, Environmental Sciences Division, Oak Ridge National Laboratory

In 2010, China accounted for 25% of the world's total CO ₂

emissions (8.3 billion metric tons), while the U.S. accounted for 16%

(5.4 billion metric tons)

Percentages reflect share of total global CO2 emissions in 2010

Fig. 41

Page 18: Major Trends Impacting Colorado’s Future Today and Tomorrow

The Changing Workforce

Page 19: Major Trends Impacting Colorado’s Future Today and Tomorrow

Migration of people U.S. migration vector

from East to West remains unchanged.

Colorado now “first choice” of 25-34 year old migrantsNew vector from Latin

America

Page 20: Major Trends Impacting Colorado’s Future Today and Tomorrow

Millennials Largest Population Group - 2014

0 to 4 5 to 9 10 to 14

15 to 19

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 to 79

80 to 84

85 to 89

90+0

50,000

100,000

150,000

200,000

250,000

Population 2014 = 2.99 million

Millennials833,000

Gen X632,700 Baby Boomers

701,600

Silent Gen207,700

Greatest Gen

15,100

Next Gen 599,900

Page 21: Major Trends Impacting Colorado’s Future Today and Tomorrow

Baby Boomers Slow to Retire

• Replacing 401k losses during the Great Recession

• Increased longevity and fears of having enough for lives into age 90 keeps Boomers working.

• Example: Projected aerospace retirees in 2012 was 8% - actual percentage who retired - 1%.

Page 22: Major Trends Impacting Colorado’s Future Today and Tomorrow

Millennials Largest Population Group - 2024

0 to 4 5 to 9 10 to 14

15 to 19

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 to 79

80 to 84

85 to 89

90+0

50,000

100,000

150,000

200,000

250,000

300,000

Population 2024 = 3.45 million

Millennials941,100

Gen X638,900

Baby Boomers636,200

Silent Gen120,300

Future Gen229,500

Next Gen 880,400

Page 23: Major Trends Impacting Colorado’s Future Today and Tomorrow

Changing Workspaces

Millennials are most educated generation in history. Most bachelor’s degrees conferred in business, the social sciences and history, health sciences, and education.

One-half to two-thirds of Millennials are interested in entrepreneurship, and 27% already self-employed.

29% of entrepreneurs were 20 to 34 years old in 2011. Three out of four Millennials say that work-life balance

drives their career choices. This balance will place greater emphasis on transportation and access to the mountains.

Page 24: Major Trends Impacting Colorado’s Future Today and Tomorrow

Aerospace

Aviation

Medical Devices

Telecom

Cleantech

Banking/Finance

Insurance

Pharma

IT/Software

Investments

Healthcare & Wellness

Fossil Fuels

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

-5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

Nin

e-C

oun

ty L

ocat

ion

Qu

otie

nt

Rel

ativ

e to

U.S

. (A

vg.=

1.0)

Avg. Annual Employment Growth (2007-2012)

Metro Denver Industry Clusters2007 - 2012

Page 25: Major Trends Impacting Colorado’s Future Today and Tomorrow

Aerospace

Aviation

Medical Devices

Telecom

Cleantech Banking/Finance

Insurance

Pharma

IT/Software

Investments

Healthcare & Wellness

Fossil Fuels

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

-0.5% 0.5% 1.5% 2.5% 3.5% 4.5% 5.5% 6.5%

Nin

e-C

oun

ty L

ocat

ion

Qu

otie

nt

Rel

ativ

e to

U.S

. (A

vg.=

1.0)

One-Year Direct Employment Growth (2012-2013)

Metro Denver Industry Clusters

Page 26: Major Trends Impacting Colorado’s Future Today and Tomorrow

Possible Ballot Initiatives in 2014

• Deferred maintenance on State’s roads – sales tax increase – DEAD

• State-wide fracking ban – deferred to Commission

Page 27: Major Trends Impacting Colorado’s Future Today and Tomorrow

Real Gross Domestic Product Annual Average Growth Rates

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e-4%

-3%

-2%

-1%

0%

1%

2%

3%

4% 3.8%3.3%

2.7%

1.8%

-0.3%

-2.8%

2.5%

1.6%

2.3% 2.2% 2.2%

Source: U.S. Bureau of Economic Analysis.

Page 28: Major Trends Impacting Colorado’s Future Today and Tomorrow

Metro Denver Annual Change in Population

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

-20,000

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Net Migration Natural Increase

Source: Colorado Division of Local Government, State Demography Office.

2014 Population = 2.99 million

Page 29: Major Trends Impacting Colorado’s Future Today and Tomorrow

Colorado Becoming More Diverse

2015

White Hispanic BlackAsian/PI Am. Indian

2025

White Hispanic BlackAsian/PI Am. Indian

Percent of minority population increases from 31% to 37%

Page 30: Major Trends Impacting Colorado’s Future Today and Tomorrow

Colorado 3rd fastest growing state

AZ CO KS NE NM OK TX UT WY-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

2010 2013

#4 #2

#40

Source: U.S. Bureau of Labor Statistics, QCEW.

Nonfarm Job Growth Rates

#3

Page 31: Major Trends Impacting Colorado’s Future Today and Tomorrow

Employment growth inconsistent across the state

Colorado Springs

Grand Junction

Pueblo

Metro Denver

Fort Collins-Loveland

Greeley

Colorado

U.S.

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%

1.0%

1.2%

1.9%

2.9%

3.1%

5.2%

2.9%

1.9%

Source: U.S. Bureau of Labor Statistics.

Nonfarm Job Growth Rates by Metro Area, YTD July 2014

Page 32: Major Trends Impacting Colorado’s Future Today and Tomorrow

Proprietors are another significant component of employment

594,663

792,999

816,087 836,983

500,000

550,000

600,000

650,000

700,000

750,000

800,000

850,000

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

Source: U.S. Bureau of Economic Analysis.

Proprietors Employment25.5% of Colorado’s Total Employment (US avg = 22.4%)

Page 33: Major Trends Impacting Colorado’s Future Today and Tomorrow

Milliennials and Housing

Student loan debt more than tripled in past decade, to more than $1.1 trillion. While Fannie- and Freddie-backed borrowers have an average score of 740, most Millennials have credit scores below 700. (Source: FICO)

In 2012, 36% of the nation’s Millennials were living in their parents’ home. This is the highest share in at least four decades. (Source: Pew Research Center)

Younger buyers tend to buy older homes, and are more likely to buy previously owned homes. Most often they do so because the home is a better price and better overall value. (Source: National Association of Realtors)

Page 34: Major Trends Impacting Colorado’s Future Today and Tomorrow

“Always end a speech on a high note.”

Is legalized marijuana hurting our economic future?

Page 35: Major Trends Impacting Colorado’s Future Today and Tomorrow

2015• Growth will continue, but at slower rate as

U.S. returns to more “normal” five-year business cycle. Expect 2.0% growth rate.

• High housing prices will slow job growth, as Phoenix, Las Vegas and Dallas costs will compete strongly against Colorado. “Most expensive housing market without a coast.”

• If you own a house, your net worth will continue to grow, but not at the 15% rate of 2012-13.

Page 36: Major Trends Impacting Colorado’s Future Today and Tomorrow

Enjoy another great year!