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2016 Outlook: Headwinds or Tailwinds?
Brian LewandowskiAssociate DirectorBusiness Research DivisionLeeds School of Business November 20, 2015
Business Research Division | Leeds School of Business | University of Colorado Boulder
Real GDP Growth
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
PercentQuarterly and Annualized Real GDP 1990-2016
Quarterly GDP
Annualized GDP 1990-1999
Annualized GDP 2000-2009
Sources: Bureau of Economic Analysis and Consensus Forecasts.
Business Research Division | Leeds School of Business | University of Colorado Boulder
Long Term GDP Growth Trend
0.00.51.01.52.02.53.03.54.04.55.0
Q2 1967 Q2 1973 Q2 1979 Q2 1985 Q2 1991 Q2 1997 Q2 2003 Q2 2009 Q2 2015
20-Year Quarterly Moving Average
Sources: Bureau of Economic Analysis and Consensus Forecasts.
Business Research Division | Leeds School of Business | University of Colorado Boulder
10
12
14
16
18
20
22
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Trillions, USD
Recession 18 Months
Recession 8 Months
GDP
Actual Projected
Source: Congressional Budget Office, Budget and Economic Outlook, Fiscal Years 2015 to 2025.
GDP and Potential GDP
Potential GDP
Business Research Division | Leeds School of Business | University of Colorado Boulder
National Employment
Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and NABE Outlook.
-900
-700
-500
-300
-100
100
300
500
2000 2002 2004 2006 2008 2010 2012 2014 2016
Thousands, Month-over-Month
Recession 18 Months
Recession 8 Months
Business Research Division | Leeds School of Business | University of Colorado Boulder
Labor Force Participation Rate
Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and NABE Outlook.
62.0
63.0
64.0
65.0
66.0
67.0
68.0
1980 1985 1990 1995 2000 2005 2010 2015
Percent
Business Research Division | Leeds School of Business | University of Colorado Boulder
Labor Force and Unemployment RateNational by Age Cohort October 2015
0
10
20
30
40
50
60
70
80
90
20-24 25-34 35-44 45-54 55+
Labor Force Participation RateUnemployment Rate
Source: Bureau of Labor Statistics, Current Population Survey (CPS).
Business Research Division | Leeds School of Business | University of Colorado Boulder
Unemployment Rate
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
U-3U-2
U-1
Percentage of Labor Force
Source: Bureau of Labor Statistics (Seasonally Adjusted).
Business Research Division | Leeds School of Business | University of Colorado Boulder
Labor Underutilization
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
U-6
U-5U-4U-3U-2
U-1
Percentage of Labor Force
Source: Bureau of Labor Statistics (Seasonally Adjusted).
Business Research Division | Leeds School of Business | University of Colorado Boulder
State Employment GrowthPre-Recession Peak to September 2015
Business Research Division | Leeds School of Business | University of Colorado Boulder
Year-over-Year Growth
Business Research Division | Leeds School of Business | University of Colorado Boulder
Personal Income Growth, Q2 2014-Q2 2015
Business Research Division | Leeds School of Business | University of Colorado Boulder
Household Wealth
0
20,000
40,000
60,000
80,000
100,000
120,000
Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 2015
$ Millions
Mutual Funds
Corporate EquitiesReal Estate
Other Assets
Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B100) (Not Seasonally Adjusted).
Business Research Division | Leeds School of Business | University of Colorado Boulder
S&P/Case-Shiller Home Price IndicesAugust 2015
Source: Standard & Poor’s (Not Seasonally Adjusted).
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
New YorkChicagoWashingtonClevelandMinneapolisBostonCharlottePhoenixDetroitAtlantaSan DiegoLas VegasTampaLos AngelesMiamiSeattleDallasPortlandDenverSan Francisco
Percent Change
Business Research Division | Leeds School of Business | University of Colorado Boulder
Housing Affordability Index
60
100
140
180
220
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Composite Index
Source: National Association of Realtors.
Business Research Division | Leeds School of Business | University of Colorado Boulder
Household Debt BurdenPercent of Disposable Income
13.0
14.0
15.0
16.0
17.0
18.0
19.0
20.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
1980Q2 1983Q4 1987Q2 1990Q4 1994Q2 1997Q4 2001Q2 2004Q4 2008Q2 2011Q4 2015Q2
FORDSR
Financial Obligations Ratio (R-axis)
Financial Obligations Ratio (L-axis)
Source: Federal Reserve, Household Debt Service and Obligations Ratios.
Business Research Division | Leeds School of Business | University of Colorado Boulder
Household Debt Growth
Source: U.S. Flow of Funds Account, Z.1 data release.
-500
0
500
1,000
1,500
Q22001
Q22002
Q22003
Q22004
Q22005
Q22006
Q22007
Q22008
Q22009
Q22010
Q22011
Q22012
Q22013
Q22014
Q22015
Consumer Credit Debt
$ Billions Household Debt Growth
Home Mortgage Debt
Business Research Division | Leeds School of Business | University of Colorado Boulder
0
20
40
60
80
100
120
140
160
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
1985=100
National Confidence
Index of Consumer ConfidenceHousing
Sources: The Conference Board and National Bureau of Economic Research.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Plans to buy a home in the next 6 months
NewLived inUncertain
6.35.7
October2015
October 2014
Business Research Division | Leeds School of Business | University of Colorado Boulder
Vehicle Sales and Retail Sales
Sources: Seasonally Adjusted Annual Rate, Autodata Corp., Motor Intelligence, U.S. Census Bureau.
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
2005 2007 2009 2011 2013 2015
Retail and Food Services SalesYOY, Percentage Change
0
5,000
10,000
15,000
20,000
25,000
2005 2007 2009 2011 2013 2015
Vehicle SalesThousands, SAAR
Business Research Division | Leeds School of Business | University of Colorado Boulder
U.S. HousingSupply, Inventory, and Permits
Source: New Houses Sold and For Sale, U.S. Census Bureau.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0
100
200
300
400
500
600
700
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Months of SupplyNew SF Home
Inventory (thousands)
Housing Supply (R Axis)
SF Homes for Sale
Number of Private Housing Building Permits
Business Research Division | Leeds School of Business | University of Colorado Boulder
National Housing Starts
1.121.27
0.0
0.5
1.0
1.5
2.0
2.5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Millions
Sources: U.S. Census Bureau and Consensus Forecasts.
Business Research Division | Leeds School of Business | University of Colorado Boulder
ISM Indices
Source: Institute for Supply Management (ISM).
30
35
40
45
50
55
60
65
70
2003 2005 2007 2009 2011 2013 2015
ISM Manufacturing Index
30
35
40
45
50
55
60
65
70
2003 2005 2007 2009 2011 2013 2015
ISM Non-Manufacturing Index
Business Research Division | Leeds School of Business | University of Colorado Boulder
The FED
• QE 1
• QE 2
• Fed promises near zero interest rates until mid-2013, 2014, 2015, 2016, 2017?
• Large balance sheet
• Key Rate Change in December?
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
2007-01-03 2008-12-03 2010-11-03 2012-10-03 2014-09-03
Other Assets
Mortgage BackedSecuritiesFederal AgencyDebt SecuritiesTreasurySecurities
$ Millions
Source: Federal Reserve Balance Sheet.
Business Research Division | Leeds School of Business | University of Colorado Boulder
Interest Rates
Source: Federal Reserve and Moody’s Analytics.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Interest Rates, 2000-2017(forecast)Percent
10-Year T-Note
3-Month T-Bill
Business Research Division | Leeds School of Business | University of Colorado Boulder
The Colorado Economy
(Cameron Redwine)
(Ed Andrieski)
Business Research Division | Leeds School of Business | University of Colorado Boulder
Colorado Rankings
Metric 1-Year 3-Year 5-Year 10-Year Real GDP Growth 5 3 9 9Employment Growth 21 6 5 5Population Growth 4 3 4 6Personal Income Growth 7 1 3 9PCPI Growth 9 12 23 29PCPI 14 16 13 12Average Annual Pay Growth 8 16 20 20Average Annual Pay 13 12 12 12Unemployment Rate 13 27 29 22Labor Force Growth 38 17 12 7FHFA Home Price Index 1 5 6 4
Data Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Bureau, Federal Housing Finance Agency, and the Colorado State Demography Office. BRD calculations. Note: 1-year, 3-year, and 5-year are based on the compound annual growth rate.
Business Research Division | Leeds School of Business | University of Colorado Boulder
Change in Population
4th-fastest state for percentage growth
8th-fastest state for absolute growth
22nd-most populated state in nation
Continued net migration into the state
83% of population along Front Range
Source: Colorado Demography Office.
0
20
40
60
80
100
120
2004 2009 2014 2019 2024 2029 2034 2039
ThousandsChange in Colorado Population
2004-2040
Natural Increase
Net M
igration
Business Research Division | Leeds School of Business | University of Colorado Boulder
Colorado EmploymentMonths to Recovery
Source: Bureau of Labor Statistics (Seasonally Adjusted).
-7.0-6.0-5.0-4.0-3.0-2.0-1.00.01.02.03.04.05.06.07.08.0
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85
Percent
Number of Months Since Peak
January 2001-May 2008
January 2008-September 2015
Business Research Division | Leeds School of Business | University of Colorado Boulder
National and Colorado Job Growth
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year-over-Year Employment Percent Change
National Colorado
Source: Bureau of Labor Statistics, CES.
Business Research Division | Leeds School of Business | University of Colorado Boulder
Colorado EmploymentWorkers Added 2002-2016 (Projected)
Sources: Colorado Department of Labor and Employment and Colorado Business Economic Outlook Committee.
-135
-110
-85
-60
-35
-10
15
40
65
90
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Thousands
Business Research Division | Leeds School of Business | University of Colorado Boulder
Unemployment Rate
0
2
4
6
8
10
12
1980 1985 1990 1995 2000 2005 2010 2015
Percent
Source: Bureau of Labor Statistics, CES.
Colorado
National
30-YearAverage
Business Research Division | Leeds School of Business | University of Colorado Boulder
Employment RecoveryNational, State, and Local
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96
Percent
Number of Months Since Peak
National
Colorado
Colorado Springs
Greeley
Ft. Collins-Loveland
Pueblo
Grand Junction
Boulder
Denver
Source: Bureau of Labor Statistics (Seasonally Adjusted).
Business Research Division | Leeds School of Business | University of Colorado Boulder
Regional Employment Growth and Unemployment
Source: Bureau of Labor Statistics, Current Employment Statistics.
0 2 4 6
Grand Junction
Colorado Springs
Boulder
Pueblo
Denver-Aurora-Broomfield
Fort Collins-Loveland
Greeley
Unemployment RateSeptember 2015
Colorado 3.3% NSA 4.0% SA
0 1 2 3 4
Grand Junction
Colorado Springs
Boulder
Pueblo
Denver-Aurora-Lakewood
Fort Collins-Loveland
Greeley
Employment Growth Rate, September 2015 YoY
Colorado 1.7%
Business Research Division | Leeds School of Business | University of Colorado Boulder
2014
EHS
L&H
Govt
ConstFinancial
MFG TTU Other Mining InfoPBS
2015
2,470
2,480
2,490
2,500
2,510
2,520
2,530
2,540
2,550
Total jobs gained:48,900
Total jobs lost:7,400
Net change: 41,500
Employment in Thousands
Colorado Industry GrowthSeptember 2014 – September 2015
Source: Bureau of Labor Statistics, Current Employment Statistics (SA).
Business Research Division | Leeds School of Business | University of Colorado Boulder
Colorado Taxable Retail Sales12-Month Rolling Sum
Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.
50
55
60
65
70
75
80
85
90
95
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Colorado Taxable Retail Sales12-Month Rolling Sum12-Month Rolling Sum,
$ Millions
42 Months
49 Months
Business Research Division | Leeds School of Business | University of Colorado Boulder
Colorado General FundGross Revenue (excluding reserves, diversions, and transfers)
Source: Colorado Office of State Planning and Budgeting, excluding reserves, diversions, and transfers, December 2014.
6,000
6,600
7,200
7,800
8,400
9,000
9,600
10,200
10,800
11,400
12,000
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
$ Millions
Business Research Division | Leeds School of Business | University of Colorado Boulder
Housing and Construction
Business Research Division | Leeds School of Business | University of Colorado Boulder
Federal Housing Finance Agency (FHFA)House Price Index
Source: Federal Housing Finance Agency, All Transactions Indexes.
0.0 4.0 8.0 12.0
Colorado Springs
Grand Junction
Pueblo
Fort Collins
Boulder
Denver-Aurora-Lakewood
Greeley
Percent
Colorado 10.62%
Federal Housing Finance AgencyHome Prices by MSA
Q2 2014 – Q2 2015
0.0 1.0 2.0 3.0
Colorado Springs
Grand Junction
Pueblo
Fort Collins
Boulder
Denver-Aurora-Lakewood
Greeley
Percent
Colorado 2.2%
Federal Housing Finance AgencyHome Prices by MSA
CAGR Q2 2005 – Q2 2015
Business Research Division | Leeds School of Business | University of Colorado Boulder
Colorado Foreclosures2003-2015
Source: Colorado Division of Housing
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Filings
Sales
2014YTD
2015YTD
Business Research Division | Leeds School of Business | University of Colorado Boulder
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Residential Building Permits2004-2015
Residential Building Permits
Sources: U.S. Census Bureau.
Multifamily
Single Family
2014 2015
September YTD
Business Research Division | Leeds School of Business | University of Colorado Boulder
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2014 2015
September YTD2014-2015
Value of ConstructionColorado 2005-2014
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$ Millions
Nonbuilding
Residential
Nonresidential
Source: McGraw-Hill Construction.
Business Research Division | Leeds School of Business | University of Colorado Boulder
10-Year Construction EmploymentColorado vs. National Indexed Growth
-50.0
-40.0
-30.0
-20.0
-10.0
0.0
10.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
U.S. Construction Employment
Colorado Construction Employment
2005=0
Source: Bureau of Labor Statistics
Business Research Division | Leeds School of Business | University of Colorado Boulder
WTI Oil Price
Source: Energy Information Association (EIA), Cushing, OK WTI Spot Price FOB.
Average 2005-2015
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Dollars per Barrel
November 10, 2015:$44.23
November 10, 2014:$77.43
July 3, 2008:$145.31
Business Research Division | Leeds School of Business | University of Colorado Boulder
Colorado Oil Production
Source: Colorado Oil and Gas Conservation Commission.
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
100,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Barrels95.2 M
Growth29.9 M
Business Research Division | Leeds School of Business | University of Colorado Boulder
Concentration of Taxable Production
Business Research Division | Leeds School of Business | University of Colorado Boulder
Concentration of Employment
Business Research Division | Leeds School of Business | University of Colorado Boulder
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