By Caitlin Switzer
MONTROSE—(September 3, 2013) By the time speaker Alison Felix stepped in front of the crowd at Heidi’s Brooklyn Deli (1521 Oxbow Dr.) on Aug. 22, the gathering was standing room only. Felix, who was invited to the Montrose Forum by Certified Financial Planner Adam Miller of ElderAdo Financial, is assistant vice president and Denver branch executive of the Federal Reserve Bank and serves as the Fed’s regional economist for Colorado, Wyoming and Northern New Mexico. Her current research focuses on local tax incentives and the incidence of state and national corporate taxes.
After noting that most of the United States economy is currently in recovery from the recession that hit the nation so hard in 2008, Felix also stated that for the past ten years, job gains in Colorado have outpaced those in the nation as a whole.
“Colorado took a sharp hit to employment,” Felix said, “but things have picked up, particularly over the past year. The U.S. added 162,000 jobs in July, and we have averaged 200,000 per month for the past six months.”
While most of the nation’s industries are expanding, Felix pointed out highlights such as the ten percent growth experienced by Colorado’s construction sector over the past year (though the industry overall is still down by 20 percent since the start of the Downturn), increased consumer spending in the leisure and hospitality sectors—stronger in Colorado than in the nation as a whole–and a solid professional and business services sector.
A loss of jobs in the Federal Government sector continues to be a weakness, with employment down by 3.5 percent, while a sluggish energy economy continues to drag its feet. Manufacturing and the financial services industries, though down slightly, are stable, Felix said.
“Colorado’s path has been very similar to the United States overall,” Felix said. “The construction decline actually started before the recession hit. Residential construction is 50 percent below peak levels, but gains have been fairly strong; it is up 52 percent from 2012.”
Permits in Colorado are up 32 percent, though most counties lag behind peak levels and no sharp rebound has occurred.
“The housing bust was a catalyst for the recession,” Felix said, “but home prices in Colorado have risen by an average of 12 percent over the past year. All other construction activity has been mixed across the U.S., with many places still struggling…there has not been a lot of growth in public projects, but Denver’s light tail has driven the economy forward, and has been a big part of spending growth.”
Energy sectors have seen a sharp spike overall in both Colorado and the nation, with prices soaring and drilling activity occurring throughout the state, despite a slight oversupply of natural gas, Felix said. Mining accounts for four percent of Gross Domestic Product, and continues to be a growing sector of Colorado’s economy.
Though manufacturing has been in recovery for the past three years, the sector has dipped over the past seven or eight months, she said.
As the state and nation move forward, manufacturers expect to see profits increase over the next six months, and to hire more workers and spend more money on capital expenditures. While Europe appears to be out recession, Asia is still slow, Felix noted.
“In the U.S. and Colorado both, we expect to see a continued recovery, but at a moderate pace,” Felix said. “We saw the initial recovery in the government sectors, and now construction an dservices are spurring the recovery.
“We are a little stronger than we were in 2011, so the drop in federal government contracts will have less impact.”
Among those who turned out for Felix’s cautiously optimist presentation was Dee Laird of Montrose.
“I think she is perhaps a little optimistic,” was Laird’s comment following the forum presentation. “It’s not as good as she thinks.”