Moving to Colorado 2013-2015...Economic Outlook? (Denver, Salida: oceanfront, unemployed, buy)

[SouthXSW]

Colorado has a large energy and tech sector and those industries will drive the economy. States with even larger energy economies will fare even better like Texas, Oklahoma, North Dakota and Pennsylvania, especially if natural gas takes off. Colorado will see thousands of new jobs both in Denver and the Western Slope if that happens.

[jazzlover]

Originally Posted by SouthXSW

Colorado has a large energy and tech sector and those industries will drive the economy. States with even larger energy economies will fare even better like Texas, Oklahoma, North Dakota and Pennsylvania, especially if natural gas takes off. Colorado will see thousands of new jobs both in Denver and the Western Slope if that happens.

Sorry, but energy in Colorado can not "drive" the whole economy. It didn't do that even in the boom days before the energy crash of the 1980's. As for the jobs outlook, Wyoming has had one of the largest energy economies in the United States for decades. It manages to support a population of just over 500,000. Even if Colorado's energy economy was as large as Wyoming's, that still leaves 4.5 million Coloradans to support with other commerce or industry. Even Colorado's status as a regional commerce center for the energy industry has waned. Don't believe it? Take a look at how many energy people have seen their jobs transferred elsewhere in the last decade or so--there's been plenty.

As for high tech, Colorado will always just be an "overflow" state for those industries. For decades, Colorado has added some high-tech employment in booms, only to lose much of it when a downturn hits. Add to that fact that Colorado has a pretty second-tier education system when it comes to tech graduates compared to many states (and getting worse because of the state's fiscal crisis) and it becomes clear that Colorado will always be playing second-fiddle to a lot of other places in high-tech.

I've also watched the Colorado economy for long enough (several decades) to know that the natural gas boom will be transitory. The nature of natural gas production is that it tends to come on quickly, with the fields reaching maturity relatively fast, then with rapid production decline.

None of this is what the pump-monkeys in the Chamber of Commerce want people to hear, but it is what it is. Add in Colorado's festering water problems, crumbling infrastructure, fiscal follies, and other mischief and things don't look very sanguine for Colorado's future.

[Idunn]

When 'driving' an economy, best not to do it off a cliff.

Just in natural gas, the promised jobs and wider economic benefit will probably never match the hyperbole of those seeking political favors. But no matter the income, at some point too they will be gone and as much history as hard rock miners of yore. As their fellows, also in leaving a legacy.

That of mining sprinkled across the state, with still polluted water courses, and visible scars not at all healed, such as the poignant yellow tailings at Central City. With natural gas exploitation it will be Colorado's underlying water, its aquifers and delicate geology which will be fracked. For good.

They will be as long gone as the miners disappeared in 1893. Yet their legacy as close as the potable water you wished you still had.

[flyingcat2k]

The Niobrara is an old play that has recently become "hot" again due to ol' Aubrey (McClendon, CEO of Chesapeake Energy) bringing in the Chinese to develop plays underneath Parker and Aurora. I doubt that much will come of it as CHK's plan, according to the Denver Post, is to use land reserved for open space for their drilling pads. That has about as much chance as mining for gold in Yellowstone National Park.

There are some new oil reserves being found on the Front Range from time to time but the DJ-Basin and the Niobrara are very isolated pockets of oil and gas, not a contiguous zone like the Bakken or Permian. For that reason, if you hit a reserve that isn't large enough, the well won't pay out, ie. be profitable, and will be capped off and abandoned. There will be some activity in Colorado but it will be peripheral. There is too much money to be made in North Dakota and Texas to fiddle with difficult formations and NIMBY landowners in Colorado.

I would like to second the opinions about Colorado being heavily dependent on Fed spending, not only on defense but energy and government contracting as well. Most government contractors have large offices in Denver. If we go to August 2 without a deal, I expect the contractors to be stiffed first. Thus, you will have a huge layoff in Denver the first week of August when it becomes clear that both political parties are fine with trashing the US Dollar and hiking our interest rates by 4% in a week. Even if a deal is struck, jobs will likely be relocated out of Colorado to Virginia as contractors attempt to put a face with a name to the local congressman from X district in some-or-other state. If it goes into September, the Post may as well run the headline "Will the last person in Denver turn out the lights?"

[jazzlover]

As a little side note, the list of Fortune 500 companies with headquarters in Colorado shows pretty clearly how unbalanced the state economy is. There are 8 Fortune 500 companies headquarted in Colorado--soon to be 7 with Qwest being acquired. 5 of the 8 are telecomm/cable companies, with one construction company, one mining company, and one aerospace company rounding out the field. Given the ongoing consolidation in the telecomm field, it's a pretty good bet that one or more of those telecomm's might leave Colorado at some point.

Compare that with our neighboring state of Nebraska, just as a "for instance." It has 5 Fortune 500 companies headquartered in a state with well less than half of Colorado's population. Of those 5 Fortune 500 companies, there is one integrated food processing company, one heavy construction company, one insurance company, one railroad, and--the biggie--the mega-diversified holding company, Berkshire Hathaway.

Hmm, I wonder if the fact that Colorado--which bases much of its economy mostly on government, a lot of unstable technology and telecomm industries, and recreation--currently has an unemployment rate of 8.7%; and Nebraska--whose economy is substantially based based on agriculture, food processing, and basic manufacturing--has an unemployment rate of 4.1%? These figures according to the May 2011 Bureau of Labor Statistics report.

[CosmicWizard]

jazzlover wrote:

and Nebraska--whose economy is substantially based based on agriculture, food processing, and basic manufacturing--has an unemployment rate of 4.1%?

Yeah, but those peolple are living in Nebraska. Not that there's anything wrong with that, but we get to live in Colorado. If I had to live in one of the plains states, I'd prefer Iowa or South Dakota over Nebraska.

[SouthXSW]

Originally Posted by CosmicWizard

jazzlover wrote:

and Nebraska--whose economy is substantially based based on agriculture, food processing, and basic manufacturing--has an unemployment rate of 4.1%?

Yeah, but those peolple are living in Nebraska. Not that there's anything wrong with that, but we get to live in Colorado. If I had to live in one of the plains states, I'd prefer Iowa or South Dakota over Nebraska.

Or Oklahoma where the economy is currently booming and there are mountains and lakes with more mild winters than Nebraska and Iowa.

Denver still has a large intl airport and diverse industries so it should rebound before the rest of Colorado as a whole.

[galtsgulch]

Any prediction at 2013 and beyond is a wild guess at best, but at the current rate the Colorado economy and national economy does not look good (that is an understatement). Jazz loves to paint a picture of Colorado as an independently poor performing state amongst a group of 50 that can really control their own fate. However, the notion that the states and not totally interconnected into a national economy (for better or worse) is fantasy. Some states may do marginally better or worse at particular point in time but the country as a whole is on this ride together.

That said, cushy government jobs such as teaching (or whatever Jazz did for the majority of his career for that matter) are going to be difficult or impossible to find. It would be better to develop a specific skill or expertise. Finding a job that requires less than 9 months of work for a gold plated pension plan after 30 years is a thing of the past.

[jazzlover]

Originally Posted by galtsgulch

That said, cushy government jobs such as teaching (or whatever Jazz did for the majority of his career for that matter) are going to be difficult or impossible to find. It would be better to develop a specific skill or expertise. Finding a job that requires less than 9 months of work for a gold plated pension plan after 30 years is a thing of the past.

I've never had one of those "cushy" jobs--either in my years in the public or private sectors. I'm actually still employed in Colorado because I DO have some pretty unique skills, education, and training. Fortunately for me, they are skills that can potentially transfer to another career or locale if things continue to turn to crap here. Oh, and I intend to continue to work at something as long as I'm physically and mentally able to do so--I enjoy the challenge of it and the satisfaction it brings. Getting paid for doing something that I, overall, find quite enjoyable is a bonus.

[wanneroo]

Originally Posted by SouthXSW

Or Oklahoma where the economy is currently booming and there are mountains and lakes with more mild winters than Nebraska and Iowa.

Denver still has a large intl airport and diverse industries so it should rebound before the rest of Colorado as a whole.

Yes Denver is still a major distribution point and the airport has worked out really well and brought in tons of business. They have also been able to pay off the debt for the airport early as well.

I think overall the Denver area is where you want to be in Colorado for job options and regular real estate like houses with yards.

Government cutbacks probably will hurt the economy temporarily, but it is necessary for long term survival of the USA.

I think the bigger issue is we are at the threshold of going under as a country. Colorado is chained to that success or failure. We are $14 trillion in debt as a country with trillions more coming, plus we keep devaluing the dollar with "stimulus". If the spending isn't stopped, we are looking at a depression for 10 to 15 years. They keep repeating the mistakes of the great depression, so it might not end well.

And a lot of times, as I found out right after 9/11 in the tourism business, all it takes is for perception to change peoples behavior, regardless of how much money they might have. People didn't want to fly or travel the winter after 9/11 and that was a hard 18 months for me. If there continues to be more bad news about the economy, even if funds are there, people may hold onto their cash and not travel or buy stuff, under the perception things could get worse.

Things could go either way, Colorado could be doing really well in 2015 or it could be dire.