Economists forecast slow improvement in Colorado
National politics creates uncertainy, harms growth
DENVER – Although thousands of Coloradans remain worse off than before the recession began in 2008, a slow recovery is starting to gain momentum, state economists said Friday.
Colorado is doing better than the nation as a whole, and Southwest Colorado is better than the state average, according to reports by the top economists for the Legislature and the governor.
“There’s only certain pockets of the economy that I think are doing well,” said Jason Schrock, chief economist for Gov. John Hickenlooper’s budget office.
The recovery is strongest in states with energy development and high-tech industries, he said.
“We just continue to see more evidence that Colorado is one of the bright spots,” Schrock said.
Clusters of technology companies are springing up in Front Range cities, creating an “ecosystem” that lets companies feed off each others’ knowledge. The phenomenon is spreading, too. Schrock called out Durango and Crested Butte as two smaller cities with emerging entrepreneurial cultures.
The Southwest Colorado regional unemployment rate fell to 6.3 percent so far this year, down eight-tenths of a point from last year.
The forecasts from the two economics offices do not take into account the effects of last week’s widespread floods, whose costs are still being tallied.
Politics also creates uncertainty and slowness in the economy, said Natalie Mullis, the Legislature’s chief economist. Congress is fighting over whether to shut down the government and raise the nation’s debt ceiling, the national health-insurance law is causing worries, and war in the Middle East is always a fear, Mullis said.
Still, for a Legislature that has become accustomed to cutting budgets, Friday’s news was welcome. Mullis predicted the state will end its 2013-14 fiscal year with a $145 million surplus, in addition to the savings account that is already built into the budget.
And the state finished the 2012-13 year with $1.1 billion in the bank. That money has been transferred to the State Education Fund, a savings account for schools. House Republicans are already calling for some of the surplus school money to be spent on flood relief.