WESTMINSTER — Economic policies of the new Trump Administration will lead to higher-than-anticipated growth nationwide and in Colorado over the next two years, but that “Trump Bump” will dissipate, leading to slower growth in the following two years.
That was the message from Phyllis Resnick, lead economist for the Colorado Futures Center at Colorado State University, speaking at the Metro North Economic Forecast Friday at the Marriott in Westminster.
The forecast attracted 270 attendees and was presented by Vectra Bank Colorado and the Metro North Chamber of Commerce.
Resnick said economists have revised their economic projections based on President Donald Trump’s surprise electoral victory in November, with some predicting near-term growth as high as 3 percent.
“The election … did change the national economic outlook,” Resnick said.
Trump has proposed a $1 trillion infrastructure-spending plan, and is expected to present a major tax-cut proposal.
Such stimulus programs “front load a fair amount of economic activity into the next two years,” Resnick said, but dampening economic activity in the three- to five-year forecast.
The problem, she said, is that the economy is essentially at full employment, with a national unemployment rate of 4.8 percent and a Colorado unemployment rate of 3 percent.
“When you stimulate an economy that is near full employment, you get pressure for increase in prices,” Resnick said, with workers demanding more in wages, driving up the cost of labor. And as people have more money, they spend it, driving up prices, she said.
That inflationary pressure likely will lead the Federal Reserve to raise interest rates in order to cool the economy.
“Adding stimulus is going to put a natural brake on that economic growth,” she said.
In Colorado, Resnick predicts no easing of robust housing prices along the Front Range, with strong demand for housing as the state continues to increase in population.
“The strong economy, we think, will continue to propel real estate prices in Colorado,” she said, with price pressure especially high in the Denver metro area.
Elizabeth Garner, Colorado state demographer, told the audience that, although Colorado ranked as the seventh-fastest-growing state in terms of population from 2015 to 2016, that growth rate — 1.7 percent — has slowed; the state ranked No. 2 the prior year.
She noted that almost half of Colorado counties experienced a population decrease, with most growth occurring along the Front Range .
“This will be a challenge moving forward,” she said. “How do we provide services in both types of state (half declining and half experiencing growth).”
She noted that Larimer and Weld counties are projected to add 500,000 residents from 2010 to 2040, leading to strong demand for housing, retail and other services.
“It’s a lot of people,” she said.
Garner noted that the state’s population is aging, with 25 percent of state residents being baby boomers as of 2015. Residents 65 and older will increase in number from 719,000 to 1.27 million by 2030, she said.
Barry Gore, president and CEO of Adams County Economic Development, said the Metro North region — essentially extending from Interstate 70 to just north of Colorado Highway 7 and from Denver International Airport to Arvada and excluding most Boulder County communities — will experience remarkable growth in the years ahead.
“It is a very exciting time in the Metro North region,” he said.
Gore cited a long list of major new projects and “brownfield” developments in Adams, Broomfield, Jefferson and Weld counties, ranging from creation of a downtown Westminster through redevelopment of Westminster Mall to vast new business, distribution and energy operations along the Interstate 25, Interstate 76, Interstate 70 and U.S. Highway 85 corridors.
“It is going to be a staggering amount of growth,” he said, and will include hundreds of thousands of apartments and tens of thousands of single-family homes.
“The Metro North region is going to be that place where metro Denver does business with Northern Colorado or Brighton or Boulder,” he said, allowing companies to shorten commute times for workers in multiple regions.
“We’re going to kind of be the center,” he said, in the “middle of fastest growing counties in the state.
“It is brace for impact,” he said. “The world as we know it in the Metro North region is not going to be the same.”