The booming growth in the Colorado Springs economy of the past two years will continue next year as a strong job market keeps consumers spending on furniture, appliances and travel, according to a forecast from the University of Colorado Colorado Springs Economic Forum.
The forecast calls for faster growth than this year in the area's economic output, called gross metropolitan product, job growth continuing at the same rate as a year ago and slightly higher gains in retail sales from the past two years.
But the outlook also calls for slower income growth and a slightly higher unemployment rate as the local economy continues to feel the effects of residents who struggled to find work after the last two recessions and took jobs for which they were overqualified, said Tatiana Bailey, the forum's director.
"The locally economy is definitely headed in a good direction and growing at a rate well above inflation and faster than the state or the nation," Bailey said. "The boom will continue, mostly due to consumer spending since consumer confidence is at a very high level and the housing market will stay strong. While I expect to (Federal Reserve) to raise interest rates in December, the increase likely will be so small that it will have little effect on the local or state economies and won't slow down the housing market much at all."
Bailey will present the forum's forecast Friday during its annual event at The Broadmoor, which for the first time is scheduled in the afternoon rather than morning. The event begins at 1 p.m. and also includes a national economic forecast by Jim Paulsen, chief investment strategist for Wells Capital Management, speeches by Mayor John Suthers and Gov. John Hickenlooper and a panel discussion featuring Colorado Secretary of State Wayne Williams, National Cybersecurity Center CEO Ed Rios and Kelly Manning, director of the Colorado Small Business Development Center network.
The Springs area added nearly 8,300 jobs last year, or nearly 50 percent more than in 2014, with much of the growth coming in the health care, restaurant, construction and professional and technical services industries. Bailey said those new jobs were a major factor fueling consumer spending growth, but she is concerned that a labor shortage that has already hit the Denver and Boulder areas is spreading to the Colorado Springs economy. Without a supply of qualified, available labor, Bailey said the area's job growth will start to slow in the next year or two.
Part of Bailey's concern is a smaller percentage of the area's population is either working or seeking jobs, compared with the rest of the state and nation. She speculated that may be the result of military spouses who don't work and a higher percentage of potential workers who lack the skills needed for available jobs.
"I worry that the tight labor market will constrict growth in the near future. We need to focus on training more people for mid- to high-skill jobs because the smartest communities take advantage of good times and invest in building their work force through training," Bailey said.
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