The Leeds Business Research Division at the University of Colorado Boulder released their 55th annual “Colorado Business Economic Outlook Forecast” Monday.
Richard Wobbekind, executive director of the Business Research Division and senior economist at the University of Colorado Boulder, joined KUNC’s Colorado Edition to walk us through the findings of the report, and what’s ahead for our state’s economy in 2020.
These interview highlights have been lightly edited for length and clarity.
Erin O’Toole: Do you go back and look at how accurate predictions have been in the past?
Richard Wobbekind: Absolutely. Every year and every sector. So at the mid-point of the following year, we have the committee chairs meet with us and we go through how their forecast is performing six months into the year. So we typically do that in June and publish something around that in July. But then we are always going back and looking at the year in retrospect. Which sectors performed as expected, which sectors didn’t, and of course the overall number which is the biggest number.
And so this year it looks like we’re going to be within about a thousand of what we projected in terms of job growth last year, just about a thousand lower. So this particular forecast is looking very accurate, although one sector in particular, agriculture, we under-forecast agriculture. You always have things that hit and things that miss a little bit, but overall we spend a lot of time looking at that.
The report said that the economic mantra of 2019 was growing but slowing. Do you see this carrying over into Colorado’s economy for 2020?
Absolutely. We again are forecasting about 10,000 fewer jobs in 2020 than were created in 2019. Part of it is labor constraints in terms of incredibly low unemployment rates and very tight labor markets. But a piece of it of course is the national economy growing over 2% this year, about 2.3%, and then going to 1.8% next year.
And a piece of that slowing of the national economy, which we’ve even seen in the third and fourth quarter of 2019 has been business investment. So when you see business investment slowing and GDP growth slowing, it portends slower growth for Colorado in the sense that we have many businesses in Colorado which are “B2B,” meaning that they’re selling their product to other business as a capital good or a software product, and so we’re anticipating that slowdown in business investment will slow down some of the growth in Colorado.
And of course there is a big election coming up in 2020. What will that mean for the economy?
Election years in general tend to be softer years for the national economy. The uncertainty created around an election makes both business, but also consumers perhaps more hesitant to consume or invest. So we know that historically that has been the case, this particular election aside. I think if you factor in the polar nature of what is going on in politics right now, that probably even heightens that level of uncertainty.
So we definitely believe that 2020 will be a "wait and see" year, again that’s part of the reason for the lower forecast for job growth this year and for business investment this year. We have an election, we have trade issues we’re still working through, and the combination of those factors slows the economy down a little bit.
This conversation is part of KUNC's Colorado Edition for Dec. 9. Listen to the full episode here.