Economic Forecast For Northern Colorado Looks Bright
All signs point towards steady economic growth in northern Colorado in the year ahead. That’s according to a panel of business and economic experts who gathered in Greeley Thursday for the 2013 Northern Colorado Business Report economic forecast.
Over 100 northern Colorado business and civic leaders gathered at the University of Northern Colorado to hear the NCBR forecast. Tom Binnings, a presenter from Summit Economics says while northern Colorado’s economy looks good, there continues to be real fear that the U.S. could sink into recession with federal austerity measures on the horizon.
“This was actually a difficult forecast to put together because we really didn’t know which way it was going to go until January 1st. Unfortunately, I think we’re simply in round three or four of multiple rounds before we know where we’re going to stand with the national economy long term.”
Even with an unsettled national outlook Binnings says areas of northern Colorado will be buffeted
somewhat by continued growth in the oil and gas industry as well as a steady real estate and banking market. Joe Bonner president of Community Banks of Colorado says as the region’s economy returns to its feet, bankers have a duty to start lending again.
“Bankers you know, we ride the coat tails of what floats all the ships in the harbor. Sometimes we have too big a role in sinking some of those ships,” Bonner said. “So the question if banks will be lending? I would say as the economy stabilizes bank will do more lending.”
He adds that community banks need to return to funding stable investments that help drive the economy forward. “You know, we’ve got to get back to financing the butchers, the bakers and the candlestick makers because that’s what drives the economy. And that’s what we intend to do.”
One of the stable investments that banks will be looking to capitalize on is the continued growth of the oil and gas industry. Greg Pachner, domestic finance director with Noble Energy says the company drilled 200 horizontal wells last year, and have eight rigs currently running.
“We expect that to grow by a couple more this year, and we’ll drill 300 wells in 2013 in this area.”
Pachner says his company is very optimistic about industry growth and investment in the region because over 70% of Noble’s play has been tested and proven to hold significant oil and gas deposits.
One area absent from the forecast was green technology and renewable energy. Binnings says there are many reasons the industry charged with creating a ‘green energy economy’ failed to develop as hoped.
“That’s an industry that has to go through some growing pains itself, both in terms of maintaining some subsidies especially on the solar end. How do you justify that when China can come in and produce so much cheaper. So we have to almost make a national decision in terms of what we want to do.”
Overall, the state’s economy is expected to grow at a steady pace this year, with the most recent University of Colorado business economic outlook forecasting the creation of 42,000 jobs.
However, there are still some ‘what ifs’ on the horizon. As businesses both large and small begin to implement the affordable care act before 2014, many business leaders are concerned about how new regulation will affect not only their bottom lines, but also their ability to hire more people.