Expect more of the same in 2017 for the Colorado Springs economy, but the chances for a downturn are growing, said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.
The economic recovery is longest in the past 150 years, but downturns are more likely early in a presidential administration as policy changes introduce uncertainty in the economy, Bailey told more than 200 customers of Vectra Bank Colorado and guests Tuesday at the bank's annual economic forecast at the Cheyenne Mountain Resort.
"It is quite possible we could have a downturn in the next 12-18 months because there is a higher-than-average probability in the first 12-18 months of an administration because of changes made and economies don't like change," Bailey said. "That said, I expect 2017 to be similar to 2016 unless we have a major shock to the economy such as a terrorist attack or big increase in tariffs.
"I am still pretty optimistic. We have quite a bit of momentum built up, and all in all the economic is pretty positive. But there are a lot of potential shocks to the economy, both domestically and internationally."
The Colorado Springs economy grew at a 2.5 percent annual rate, when inflation is taken into account - the same rate as the nation - during 2015 but likely outperformed the nation last year, Bailey said. That growth created more than 16,000 jobs during the past two years and fueled strong consumer spending on big-ticket items like houses and vehicles, even though local wages haven't kept pace with the rest of the state, she said. However, that deficit may be narrowing because the average salary of jobs employers are trying to fill is now at least 10 percent above the state's median salary.
The combination of rapid job growth and rising salaries also is luring more residents back into the job market, helping to boost the supply of labor back to a level where it slightly exceeds the number of openings employers are trying to fill after spending much of last year with fewer workers than jobs, Bailey said. Most of the openings were in health care and technology though retailing and the restaurant industry also have a major source of job growth in the past two years and are expected to remain so well into the next decade.
Despite a hot housing market with increasing sales and prices, home affordability in Colorado Springs remains well ahead of both Boulder and Denver and remains on par with technology hotbeds like Austin, Texas, and Salt Lake City though not as good as either Huntsville, Ala., or San Antonio, Bailey said.
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