Transcript Document
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 (4 th the U.S.) cushioned the recession’s blow – especially in housing values.
best in 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
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
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
Colorado Per Capita Personal Income
Colorado has 13 th Highest Per Capita Personal Income Level $50 000 Colorado United States $45 135 $45 000 $44 180 $41 181 $40 000 $35 000 $33 986 $30 000 $25 000 $20 000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: U.S. Bureau of Economic Analysis.
Nonfarm Job Growth Rates
Metro Denver 2013 Employment = 1.5 million 68K jobs lost 2009-2010; 64K jobs added 2011-2012; 49K jobs added 2013 6% 4% 2% 0% -2% -4% -6% 0,8% 1,1% 2004 2005 2006 2007 2008 2009 United States 2010 Metro Denver 3,5% 1,7% 2,9% 1,9% 2011 2012 2013 2014e
Source: U.S. Bureau of Labor Statistics.
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
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.
The Prospect of American Energy Independence
• • • Colorado ranks 5 th in U.S. for natural gas production and 10 th 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
• • •
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.
1.0 Trillion Barrels of Oil
Fig. 14
30 25 20
Natural Gas Production Leaders, 2008-2012 U.S. is 1st and growing; top 8 producers equal 62.0% of global production
U.S. ranks 1st with 19.8% of global production 24.05 (Tcf) 2008 2009 2010 2011 2012 15 10 5 0 U.S.
Russia
Source: International Energy Agency
Qatar Iran Canada Norway China Saudi Arabia Fig. 16
Natural Gas Production by State, 2008-2012 Colorado ranks 6th in production; production is increasing due to technology improvements
8 7 6 3 2 5 4 1 0 TX LA PA WY
Source: U.S. Department of Energy, Energy Information Administration Note: Top ten producers including Colorado
OK CO ranks 6th in production 1.6 (Tcf) CO AR NM WV UT 2008 2009 2010 2011 2012 Fig. 10
25
U.S. Crude Oil Production & Consumption, 1973-2012 Gap is narrowing; domestic production increasing since 2009; domestic consumption decreasing since 2006
20 15 10 5 U.S. Production U.S. Consumption 0
Source: U.S. Department of Energy, Energy Information Administration
Where does the U.S. get its oil?
Canada 13.6% Saudi Arabia 7.2% Venezuela 4.8% U.S. 60% Mexico 2.4% Other 8% Russia 4% Fig. 6
100%
U.S. Net Generation History by Resource, 1950-2012
30% 20% 10% 0% 90% 80% 70% 60% 50% 40% Renewables Hydro Nuclear Natural Gas Oil Coal
Source: U.S Department of Energy, Energy Information Administration; some 2012 data is provisional
Fig. 33
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.
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CO
₂
Emissions by Country: 2000, 2005, 2010 Top ten countries account for 64% of world CO
₂
emissions
25% 8 7 In 2010, China accounted for 25% of the world's total CO₂ emissions (8.3 billion metric tons), while the U.S. accounted for 16% (5.4 billion metric tons) 2000 2005 2010 6 16% 5 4 11% Percentages reflect share of total global CO 2 emissions in 2010 3 6% 2 5% 3% 1 2% 2% 2% 1% 0 China U.S.
European Union India Russia Japan Germany Iran South Korea S
ource: World Bank; Carbon Dioxide Information Analysis Center, Environmental Sciences Division, Oak Ridge National Laboratory
Canada Fig. 41
The Changing Workforce
Migration of people
U.S. migration vector from East to West remains unchanged .
New vector from Latin America Colorado now “first choice” of 25-34 year old migrants
250 000
Millennials Largest Population Group - 2014
Population 2014 = 2.99 million
Next Gen 599,900 Millennials 833,000 Gen X 632,700 Baby Boomers 701,600
200 000 150 000 100 000 50 000
Silent Gen 207,700 Greatest Gen 15,100
0 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+
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%.
Millennials Largest Population Group - 2024
Population 2024 = 3.45 million 300 000 250 000
Future Gen 229,500 Next Gen 880,400 Millennials 941,100 Gen X 638,900 Baby Boomers 636,200
200 000 150 000
Silent Gen 120,300
100 000 50 000 0 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+
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.
-5.0%
Metro Denver Industry Clusters
2007 - 2012
5.0
Aerospace 4.5
Banking/Finance -4.0% I nsurance Pharma -3.0% -2.0% 4.0
3.5
T elecom 3.0
2.5
2.0
I T/Software 1.5
A viation 1.0
Investments Medical Devices Healthcare & Wellness 0.5
-1.0% 0.0
0.0% 1.0% 2.0% Avg. Annual Employment Growth (2007-2012) 3.0% 4.0% 5.0% C leantech Fossil Fuels 6.0% 7.0%
Metro Denver Industry Clusters
5.0
4.5
4.0
3.5
3.0
T elecom Aerospace 2.5
2.0
C leantech 1.5
1.0
0.5
-0.5% 0.0
0.5% Medical Devices Banking/Finance Investments A viation Pharma I nsurance 1.5% I T/Software Healthcare & Wellness 2.5% 3.5% One-Year Direct Employment Growth (2012-2013) 4.5% 5.5% Fossil Fuels 6.5%
Possible Ballot Initiatives in 2014
• • Deferred maintenance on State’s roads – sales tax increase – DEAD State-wide fracking ban – Commission deferred to
1% 0% -1% -2% -3% -4% 5% 4% 3% 2% 3,8% 2004
Real Gross Domestic Product Annual Average Growth Rates
3,3% 2,7% 1,8% -0,3% -2,8% 2,5% 1,6% 2005 2006 2007 2008 2009 2,3% 2,2% 2,2% 2010 2011 2012 2013 2014e
Source: U.S. Bureau of Economic Analysis.
70 000
Metro Denver Annual Change in Population
2014 Population = 2.99 million 60 000 50 000 40 000 30 000 20 000 10 000 0 -10 000 -20 000 1990 1995 Net Migration 2000 2005 Natural Increase 2010 2015 2020
Source: Colorado Division of Local Government, State Demography Office.
Colorado Becoming More Diverse
Percent of minority population increases from 31% to 37%
2015 2025
White Hispanic Black Asian/PI Am. Indian White Hispanic Black Asian/PI Am. Indian
Colorado 3rd fastest growing state
Nonfarm Job Growth Rates
4,0% 3,0% 2,0% 1,0% 0,0% -1,0% -2,0% #3
AZ
#40
CO KS
#4 #2
NE
2010
NM
2013
OK TX UT WY
Source: U.S. Bureau of Labor Statistics, QCEW.
Employment growth inconsistent across the state
Nonfarm Job Growth Rates by Metro Area, YTD July 2014 U.S.
Colorado Greeley Fort Collins-Loveland Metro Denver Pueblo Grand Junction Colorado Springs 0,0% 1,9% 1,2% 1,0% 1,9% 2,0% 2,9% 3,1% 2,9% 5,2% 4,0% 6,0%
Source: U.S. Bureau of Labor Statistics.
Proprietors are another significant component of employment
Proprietors Employment 25.5% of Colorado’s Total Employment (US avg = 22.4%) 850,000 800,000 836,983 816,087 792,999 750,000 700,000 650,000 600,000 594,663 550,000 500,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: U.S. Bureau of Economic Analysis.
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)
“ Always end a speech on a high note.”
Is legalized marijuana hurting our economic future?
• • •
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.