Here’s the gist of CU’s annual event forecasting Colorado’s future economy: It’s still growing. Just more slowly.
But before you commit to another year of renting an aging apartment or investing in Colorado beef, the 54th annual Colorado Business Economic Outlook does offer insight into everything from the future of monthly natural gas bills and traffic at state parks to hardcover book sales.
Feel free to read the 136-page report here for the data, but we took the time to highlight some trends for next year based on the report and Monday’s event — both produced by the Leeds School of Business at the University of Colorado.
What does 2019 mean for Colorado residents? Businesses? Real estate developers? Transplants? Read on, but keep in mind, with any report that forecasts the future, things do change. Last year’s report was off by nearly 20,000 jobs and the state is now expected to end the year up 65,000 new jobs, instead of the 47,100 originally predicted. Next year, the educated guess is 53,200 new jobs.
Here are notable tidbits from the report, plus what the experts expect:
- More homes will be built. This is based on Colorado having the highest number of residential building permits issued this year (at 40,800) since 2005, and it’s anticipated to go even higher next year (41,100). Sound like a lot? It’s 26 percent below the peak in 2001. And there are fewer new multifamily projects.
- We still need houses. But fewer are for sale, likely because of rising home prices. If you sell your house, where do you go? Colorado was ranked sixth in the nation for fastest home appreciation with all seven metropolitan statistical areas in the state landing in the top quartile.
- Rents are going up, but not as fast as before. Instead of about 10 percent higher each year in the past few years, rents increased 3 percent statewide to an average of $1,390, as of November. Likewise, in the Denver and Boulder region, it grew 4 percent to $1,475.
- More housing for baby boomers. A “silver tsunami” is influencing the construction industry and firms are using overtime, prefabricated construction and new tools to build housing for aging people. That also translates into 2.9 percent more residential construction jobs, or 5,000 new workers.
- The trade war and Chinese tariffs continue to take a toll on farmers. China hasn’t purchased one shipment of wheat from Colorado farmers since May. But a bright spot? South Korea is buying more of our meat and agricultural products, surpassing Japan to become Colorado’s third largest market. The country also now buys the most beef from Colorado, up 73 percent as of August.
- Our monthly natural gas bills aren’t expected to increase. That’s because Colorado is the sixth-largest gas producing state “with limited external markets.” About 69 percent of residents depend on natural gas as their primary heating fuel, compared to about half in the U.S. And at $10.58 per thousand cubic feet, Colorado’s average monthly residential gas bill is also the 10th lowest nationwide.
- More people in Colorado means more places to spend your money and more retail jobs, despite major retailers going bankrupt. Again, the growth won’t be as great as 2018, but Colorado consumers will spend $101.9 billion next year, a 5.3 percent increase, and the retail industry will add 5,000 new jobs, up 1.7 percent from 2018.
- Coloradans are reading more — or at least buying more books. Book sales were up 4.4 percent with hardback books up 7 percent through the third quarter of 2018. But it’s not easy to get a job in book or in publishing. The number of jobs in publishing is expected to increase 1.9 percent in 2019, slower than this year’s 4 percent.
- But if you can get a job in software publishing, do it. The sector, which includes Cisco Systems, Google and Hitachi, added 12.1 percent more companies in Colorado last year and offers an average wage of $131,391, twice that of the statewide average.
- You’ll have less luck getting a job in telecom because the industry is still consolidating. The number of new jobs is expected to rise in 2019, though it’ll only get the state back to 2016 levels and we’re still about 10 percent below 2009’s number of 30,200 jobs.
- There are more hotels than ever in Denver but visitors may feel less pampered, as the state’s low unemployment rates are causing companies to struggle to attract and retain staff.
- Rocky Mountain National Park will be more crowded than ever, with 5 million visitors expected in 2019, up about 7 percent. If you don’t like crowds, try the state parks, which saw a 2 percent decline in visitors this year.
More on the future of real estate
- Advice for Denver companies getting priced out of RiNo and other now-hipster neighborhoods? Buy in industrial areas within 1,000 feet of a school. Marijuana growers, known for snatching up every available industrial spot, are prohibited from locating any closer. — Chris Frampton, East West Partners
- The most asked-for amenity prospective buyers want in luxury real estate: Wi-Fi. Forget the gadgets. Those get outdated as soon as you install them. — Chris Frampton, East West Partners.
- Who still shops at the mall? Lots of people but in particular, the GLM (short for good-looking mom). — Pamela Kelly, Park Meadows-Brookfield Properties
- Renters want more than a place to call home, they want to live near a coworking space to work and use its perks (also makes up for the tiny living quarters and high rents). — Jay W. Despard, Hines
- Institutional and international buyers are very interested in Denver office real estate, which energy companies comprised half of the space in the mid-80s. Why? Diversity. Denver is on the radar because the types of businesses in the region are more diversified. — Jay W. Despard, Senior Managing Director at Hines
- “Industrial is the new retail,” because the Denver area recently completed 2.1 million square feet of industrial space and there’s another 4.7 million in the pipeline. — Cyndi Thomas, Etkin Johnson
- Headlines have screamed that the Denver is overbuilding apartments “but we’ve never caught up.” — Scott Johnson, Lennar Multifamily Communities
This story was updated on December 12, 2018 to add more job data and clarity.
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