State, Local Economy Expected To Exceed National Growth
The economic outlook for Colorado Springs and El Paso County continues to be positive. According to a forecast by Dr. Tatiana Bailey with the University of Colorado-Colorado Springs, the gross metropolitan product (GMP) is expected to grow faster than the national GDP by about 1 percent, as it has steadily done for the past few years.
The forecast came as part of the annual Economic Forum hosted by the University. Bailey said the expected gains in the 2018 and 2019 Colorado economy are mostly due to growth rates across multiple industries as well as some rebounding in the oil and gas industry. She said a recent labor shortage along the Front Range has been somewhat mitigated by people entering or reentering the workforce.
“I think our ace in the hole for the state of Colorado is the diversity of sectors,” she explained. “We had 12 sectors in 2017 with between 2 and 8.5 percent growth rate.”
Those sectors include mining, agriculture forestry and fishing, management of companies and enterprises, and transportation and warehousing. Within the 12 sectors, Bailey said more than 56,000 new jobs were created in 2017.
Additionally, Bailey said the number of jobs in Colorado Springs increased 3.9 percent in the last year with the largest growth seen in health care, professional and technical assistance, construction and hospitality. The median salary for posted jobs in Colorado Springs was $78,000—more than $4,000 higher than the state. Comparatively, in April 2015, the median salary was about $55,000.
“That really tells you something about how much we’ve moved as a state and locally,” Bailey said of the median salary rate, which is also higher than that of Denver. “...Right now we’re hiring more professional jobs than lower skill jobs. That also tells me we’re at a pivot point here locally. We are at a point where we’re transforming into more of a high-tech, high-skill economy and it’s reflected in these numbers.”
Bailey said the state has continued to see a high rate of new businesses, growth in the high-tech sector, and uptick in oil and gas. El Paso County and the Front Range is now considered to be in the “high-tech corridor,” as determined by the state Department of Labor and Employment.
Year over year the employment growth rate for the city was 4.9 percent, much higher than the state’s number of 2.9 percent.
“Colorado Springs has had a nice jump in the last year. So has Denver and Pueblo,” Bailey said referencing employment growth.
Data from the Brookings Institute showed that millennials are flocking to Colorado Springs, despite affordability being a challenge for young people. Home prices in the city have increased nearly 14 percent in the past year to $324,000. That’s much higher than the national increase of close to 5 percent.
“We had a higher rate of increase [than Denver], but we’re still less expensive,” Bailey said.
When it comes to the tariffs put in place by the federal government, Bailey said the effects are yet to be seen.
“We have pretty much the same mix of countries that we export to as the U.S. [does],” she explained. “But, seemingly, we have less exposure.”
The percent of GDP that comes from exports in the U.S. is 8 percent. In Colorado, it’s a lot lower at 2.3 percent. Bailey said agriculture will be affected most by the tariffs, followed by aluminum, industrial machinery, plastics and furniture.
“We don’t really know what the downstream effects are going to be of the intermediary goods, the supply chain—it's not just the finished product, especially in today’s global economy,” Bailey said.
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