Sometimes, slow and quiet can be good—especially when an annual visit to the doctor feels like speed dating and your morning coffee shop resembles a flash mob.
But when it comes to an already sluggish construction industry, more predictions about “slow and steady” markets in the year ahead is not good news. That was gist of the message from Anirban Basu, national economist for the Associated Builders and Contractors, when he visited the Mile High City for an economic forecast in late April.
Basu did say that Colorado and the Mountain West are among the country’s stronger regional economies, with one of the fastest-growing labor markets in the U.S. “In Colorado, you have some broad-based economic drivers,” Basu told the audience of mostly ABC members on April 19. “You have ample natural resources, continuing population growth, a high quality of life and strong youth in-migration.”
All of these factors, he said, mean that the region’s long-term outlook is solid, but there are some cautionary factors, including an “overhang in commercial real estate and overly cautious lenders.”
Macroeconomic factors in the West are the same ones slowing growth nationwide: higher fuel prices, inflation, loss of economic momentum from international pressures—such as Europe and the Middle East (a situation he calls “penny wise, euro foolish”)—and uncertainty created by the vagaries of a presidential election year.
Basu cites stabilization of the stock market as a leading positive indicator, a slow increase in industrial production since mid-2009, and an improving gross domestic product—all as evidence that a double-dip recession is unlikely, with most states either recovering or moderating their economies after the recession. Only Nevada and Georgia, he said, are still struggling with near recessionary numbers, and even they are improving slowly.
He forecasts continuing soft economic growth this summer, probably somewhere near 2%, with a focus on the election, tax cuts, the fate of the estate tax and overdue infrastructure legislation.
“It’s too bad that not much will be done between now and November,” he said. “The uncertainty will become more intense and likely diminish some of the momentum going into 2013.”
There will be more appetite for risk, he added, but it will take some time to recover the 8.8 million jobs lost in the downturn and get the housing market back on track. Shaky construction job growth will continue to be a problem, he said, until private-sector capital, all but destroyed during the recession, recovers enough to spur investment in new projects. Other positives are the slow upswing in consumer confidence and an increase, albeit shaky, in the Architecture Billings Index, which indicates that more work may be coming from designers to contractors over the next few months.
Finally, he pointed to the diversity of Colorado’s economy as a plus for the state. “You have a growing health-care market, a stable higher-ed situation and a great airport that is driving growth north of Denver. The commuter rail connections will eventually help the fact that downtown is a long ways from the airport. Slow, steady growth is coming, but it will require a lot of patience and planning in the meantime.”
But when it comes to an already sluggish construction industry, more predictions about “slow and steady” markets in the year ahead is not good news. That was gist of the message from Anirban Basu, national economist for the Associated Builders and Contractors, when he visited the Mile High City for an economic forecast in late April.
Basu did say that Colorado and the Mountain West are among the country’s stronger regional economies, with one of the fastest-growing labor markets in the U.S. “In Colorado, you have some broad-based economic drivers,” Basu told the audience of mostly ABC members on April 19. “You have ample natural resources, continuing population growth, a high quality of life and strong youth in-migration.”
All of these factors, he said, mean that the region’s long-term outlook is solid, but there are some cautionary factors, including an “overhang in commercial real estate and overly cautious lenders.”
Macroeconomic factors in the West are the same ones slowing growth nationwide: higher fuel prices, inflation, loss of economic momentum from international pressures—such as Europe and the Middle East (a situation he calls “penny wise, euro foolish”)—and uncertainty created by the vagaries of a presidential election year.
Basu cites stabilization of the stock market as a leading positive indicator, a slow increase in industrial production since mid-2009, and an improving gross domestic product—all as evidence that a double-dip recession is unlikely, with most states either recovering or moderating their economies after the recession. Only Nevada and Georgia, he said, are still struggling with near recessionary numbers, and even they are improving slowly.
He forecasts continuing soft economic growth this summer, probably somewhere near 2%, with a focus on the election, tax cuts, the fate of the estate tax and overdue infrastructure legislation.
“It’s too bad that not much will be done between now and November,” he said. “The uncertainty will become more intense and likely diminish some of the momentum going into 2013.”
There will be more appetite for risk, he added, but it will take some time to recover the 8.8 million jobs lost in the downturn and get the housing market back on track. Shaky construction job growth will continue to be a problem, he said, until private-sector capital, all but destroyed during the recession, recovers enough to spur investment in new projects. Other positives are the slow upswing in consumer confidence and an increase, albeit shaky, in the Architecture Billings Index, which indicates that more work may be coming from designers to contractors over the next few months.
Finally, he pointed to the diversity of Colorado’s economy as a plus for the state. “You have a growing health-care market, a stable higher-ed situation and a great airport that is driving growth north of Denver. The commuter rail connections will eventually help the fact that downtown is a long ways from the airport. Slow, steady growth is coming, but it will require a lot of patience and planning in the meantime.”
