Charting a New (Economy) Course

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Phebe Perkins
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1 Charting a New (Economy) Course Metro Denver 2009 Economic Forecast January 2009

2 Colorado Outperforms the U.S forecast values Colorado United States Job losses less severe -0.4% -1.1% Unemployment rate lower 6.4% 7.7% Inflation Rate slightly higher 2.2% 1.9% Real Retail Trade Sales more stable 0.0% -3.5% Home Prices more stable* 1% 0% Median Home Price higher* $228,000 $199,100 Total Personal Income growing faster 2.7% 2.0% Per Capita Personal Income higher (2008) $43,100 $40,200 *Data for Metro Denver

Denver 0.5% 1.2% 1.2% 1.6% 2.3% 4.6% -0.1% U.S. -1.0% 0.0% 1.0% 2.

3 Metro Area Job Growth, Year-to-Date Through November 2008 Colorado Springs Fort Collins-Loveland Grand Junction Greeley Pueblo Metro Denver 0.5% 1.2% 1.2% 1.6% 2.3% 4.6% -0.1% U.S. -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Source: Colorado Department of Labor & Employment

4 Nonfarm Job Growth Rates 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% 4.3% 2.2% 1.1% 1.7% 1.9% 2.0% 1.8% 2.1% 0.8% 1.1% 0.0% 0.0% -0.3% -1.1% -1.4% 0.9% -0.3% -0.5% -1.1% -3.1% e 2009f United States Metro Denver Sources: U.S. Dept. of Labor; CO Dept. of Labor & Employment

5 Unemployment Rates 8% Metro Denver Total Labor Force = 1.5 million 7.7% 7% 6% 5% 4% 3% 2% 1% 5.8% 6.0% 6.4% 5.9% 5.7% 5.8% 5.5% 5.1% 5.2% 5.1% 4.7% 4.6% 4.6% 4.3% 4.0% 3.8% 3.8% 2.6% 6.5% 0% e 2009f United States Metro Denver Sources: U.S. Dept. of Labor; CO Dept. of Labor & Employment

Metro Denver Annual Employment Growth Rate by

Hospitality Educational & Health Services

6 Metro Denver Annual Employment Growth Rate by Industry Government Other Services Leisure & Hospitality Educational & Health Services Professional & Business Services Financial Activities Information Transp., Warehousing & Utilities Wholesale & Retail Trade Manufacturing Natural Resources & Construction -3% -2% -1% 0% 1% 2% 3% 4% 2009f 2008e Source: Colorado Department of Labor & Employment

7 Key Metro Denver Industry Clusters Employment 2007 Job Absolute Ranking Growth (50 largest metros) Aerospace 20, % 1 Bioscience Pharmaceuticals and Biotechnology 5, % 16 Medical Devices and Instruments 10, % 7 Energy Fossil Energy 14, % 2 Renewable Energy & Energy Research 13, % 6 IT/Software 45, % 11 Aviation 14, % 8 Financial Services Banking & Finance 44, % 9 Investments 23, % 10 Insurance 28, % 12

8 Metro Denver Average Annual Population Growth 4% 2009 population = 2.83 million 3% 2.6% 2.7% 2.7% 2% 1.3% 1.8% 1.5% 1.2% 1% 0% 1960s 1970s 1980s 1990s 2000s 2010s 2020s Source: Colorado Division of Local Government

9 Metro Denver Annual Change in Population 70,000 60,000 50,000 40,000 30,000 20,000 10, , Natural Increase Net Migration Source: Colorado Division of Local Government

10 Aging of the Baby Boomers First Boomers (born ) reach 65 in 2011 (Ages 45 to 63 in 2009) 26.7% of Metro Denver s population are Baby Boomers compared to 25.7% for U.S. Between 2008 and 2018, Metro Denver s population 65 years+ will expand from 9% of the population to nearly 14% (from 252,000 to 450,000 people) Source: Colorado Division of Local Government, State Demography Office

11 Consumer Confidence Index Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Mountain Region U.S. Source: The Conference Board

12 Stock Market Volatility (DJIA) 2004: 21% of U.S. families have stocks; 50% have retirement accounts 16,000 14,000 12,000 10,000 8,000 6,000 Jan 00 May 00 Sep 00 Jan 01 May 01 Sep 01 Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04 May 04 Sep 04 Jan 05 May 05 Sep 05 Jan 06 May 06 Sep 06 Jan 07 May 07 Sep 07 Jan 08 May 08 Sep 08 Source: Yahoo! Finance

13 Metro Denver Real Retail Trade Sales Growth Rates Source: Colorado Department of Revenue

14 Metro Denver Home Sales Source: Metrolist, Inc.

15 Metro Denver Foreclosures Sources: CB Richard Ellis; County Public Trustees

16 Median Home Price (in thousands) $250 $238.2 $239.1 $247.1 $249.5 $245.4 $228.1 $218.3 $219.0 $221.9 $217.9 $223.7 $228.0 $196.8 $195.2 $199.1 $199.1 $200 $180.2 $156.6 $167.6 $147.3 $150 $100 $50 $ e 2009f United States Metro Denver Source: National Association of REALTORS

17 Metro Denver Building Permits 30,000 25,000 20,000 15,000 10,000 5, e 2009f Multi-Family Two-Family Single-Family Source: Home Builders Association of Metropolitan Denver

18 Charting a New Course Basics matter Business spending focus on increased efficiency, profitability. Adaptations to more limited financing options. Lending practices reassessment of risk, purging of bad assets. Return to more sound financial underwriting takes time. Household budgets painful adjustments to new price levels and spending priorities. Review of options for re-growing wealth. Governments face new challenges Declining tax revenues from auto sales, fuel sales, other retail Declining property tax revenues lower property values and/or residents unable to pay Debt financing more difficult to obtain The darkest hour is just before dawn

Development Research Partners 10184 West Belleview Avenue, Suite 100 Littleton, Colorado 80127

19 Development Research Partners West Belleview Avenue, Suite 100 Littleton, Colorado (303) Patricia Silverstein, President

Maintaining Equilibrium. Metro Denver 2017 Economic Forecast January 2017

Maintaining Equilibrium. Metro Denver 2017 Economic Forecast January 2017 Maintaining Equilibrium Metro Denver 2017 Economic Forecast January 2017 Consumer Activity Income Wealth Prices Interest Rates Consumer Confidence Spend or Save? Retail Spending What & Where? Housing Options