THROUGH FREDA MIKLIN
The first economist to address the more than 400 members of the South Metro Denver Chamber (SMDC) and their guests was Henri Sobanet, whose long career in Colorado includes leadership positions in state government for former Colorado governors Bill Owens and John Hickenlooper. He currently serves as Senior Vice Chancellor of Administration and Government Relations and Chief Financial Officer of Colorado State University.
Sobanet pointed to the “massive fiscal and monetary stimulus” of $13.7 trillion nationwide from the federal government which, he said, “achieved their nominal goals of moving the economy through the period closing”. Of that total, he said $9.6 trillion had already been committed. To provide context, Sobanet noted that $9.6 trillion was equivalent to 45% of 2019 national gross domestic product.
Before the end of 2022, Sobanet said “most economic activity will return to pre-pandemic levels” with the states of Arizona, Idaho, Texas and Utah having already recovered or surpassed pre-pandemic employment levels, in part due to immigration from higher cost states. Our own state budget still has significant one-time funds from the American Rescue Plan Act that will continue to be used for years to come. While the state’s overall economic trends are positive, Sobanet noted that “it’s not the same pandemic for everyone and it’s not the same recovery for everyone.” Industries with low-wage jobs, such as leisure, hospitality and entertainment, have not returned like other higher-wage jobs, many of which have not suffered significant disruption and are now effectively at the bottom. above pre-pandemic levels.
New and heightened concerns over the past year include inflation, workforce availability and morale, supply disruptions and the pervasive problem of housing availability and affordability. in Colorado.
According to Sobanet, the average increase in the consumer price index was 2.0% in 2020 and is expected to be 3.7% in 2021 and 3.4% in 2022. Regarding the “great resignation”, he told his listeners that the main reason people quit their jobs was not pay, but culture, including opportunities for advancement. He further pointed out that in order to quit one’s job, one must have confidence that the economy will allow employees to find better jobs. On housing, he pointed to the average closed price for a single-family home in Colorado of $688,516 in 2021 from $483,777 in 2017, the decrease to 15 days of an average MLS listing in 2021 from 26 days. for the last several years. Significantly, Sobanet noted that in 2021, there was only an average of two weeks of sales inventory in the MLS.
Overall, Sobanet predicted, “for the next six months, it’s more reasonable to expect fairly robust growth rates for Colorado’s economy.” He also noted that CNBC consistently ranks Colorado eighth for its business climate, “leading the nation in innovation, technology and people.” He pointed to Colorado’s tradition of collaboration as one of its most important strengths.
Elizabeth Garner, A state demographer with the Colorado Department of Public Affairs since 2004, told the SMDC that the state’s population will continue to grow, but at a decreasing rate. She also noted that “the largest share of future growth is in the 65+ sector” of the state and that “age impacts the economy, workforce, housing and public finance”.
Colorado’s population has grown at twice the rate of increase in the nation’s total population since 2010. Our state is also becoming more racially and ethnically diverse. Focusing locally, Garner noted that 95% of recent population growth has occurred in the Front Range. Specifically, between 2010 and 2020, Denver grew by 112,000 people, Arapahoe County gained 80,000, and Douglas County gained 72,000. She also noted that the 744,500 increase in the number Coloradans’ total between 2010 and 2020 was made up of net immigration of (approximately) 445,000 and 286,000 more births than deaths statewide. Garner pointed to the fact that of the total population increase of 744,500, only 38,000 were under the age of 18, evidence of a continuing decline in birth rates that will lead to a shrinking labor force in the years to come.
Regarding housing, Garner said there were 405,000 new homes added from 2000 to 2010, compared to 278,500 from 2010 to 2020, even though the population has grown at a higher rate over the past decade. . She concluded, “We’re not doing a very good job of building housing at the same rate as household formation…We need to do a better job of marrying housing and population,” to avoid losing residents and workers. She said supply is affected by several factors, including “anti-growth/density,” while demand is affected by younger buyers who want smaller homes and aging buyers who are empty nests. She also noted that “institutional investors and cannabis companies” are buying homes and often keeping them vacant, negatively impacting supply.
Finally, Garner said that two-thirds of Colorado’s population growth from 2010 to 2020 were people of color, which going forward “will be the biggest area of growth in our workforce.” It predicts a statewide population of 7.5 million in 2050, including 1.6 million of the total increase of 1.8 million in the Front Range.
Tuhin Halder, vice president of finance and business operations for Comcast Mountain West Region, told SMDC that the supply chain disruption has created multilevel issues for businesses around the world. He gave the example of a Starbucks outlet that couldn’t get paper sleeves for its hot paper cups, so he gave customers two cups instead. Halder pointed out that a paper cup costs twice as much as a paper sleeve, which creates a large increase in product cost that was unplanned and out of control.
Another aspect of the supply chain problem, according to Halder, is that many small business owners, including those in the transportation industry, stopped what they were doing when the pandemic hit and went to work for Amazon, where the starting salary is $15 to $20/hour. and the benefits are good.
Halder also shared that Comcast expects interest rates to rise sharply in 2022. He also predicts continued bottlenecks in transportation, especially for goods entering the United States from other country. Comcast also expects the stimulus savings people have accrued to dwindle as spending rises, which will cause more people to return to the workforce and lower jobs to continue. unemployment rate. He expects these activities to eventually solve the supply chain problem, as long as COVID is under control.
The program’s moderator was Denver Gazette business reporter Dennis Huspeni. Whipplewood CPAs presented sponsor, Arapahoe County was a gold sponsor. The City of Castle Pines, Lone Tree Arts Center, and Colorado State University were silver sponsors. The table sponsors were 1stBank, The Villager’s DiaryXcel Energy, South Suburban Parks and Recreation, Alpine Bank, Academy Bank, Sky Ridge Medical Center, City of Lone Tree, Comcast, Denver Water, Hays a division of Brown & Brown Insurance and Unite Private Networks.