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The U.S. economy likely will grow by at least 2.5 percent, said Tucker Hart Adams, senior partner of Summit Economics LLC.
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“Colorado will do that well and perhaps even a bit better,” Adams said.
Adams and others gave forecasts Tuesday at the Northern Colorado Business Report’s 2014 Economic Forecast. The event drew nearly 500 people to listen to expert’s predictions in industries such as oil and gas, agriculture, real estate, health care and banking.
Adams’ optimism stems from Congress reaching a budget deal, the raising of the debt limit and the impact of lower interest rates. Adams also cautioned that inability to compromise by members of Congress as well as a lack of confidence among businesses and consumers would hamper the economic recovery.
The U.S. economy will have to generate 200,000 jobs each month to lower unemployment, Adams said. Many jobs created in 2014, however, will be temporary or part-time positions.
Inflation will increase a modest 2 percent as energy prices have stabilized, she said. Interest rates will remain low.
Rutilio Martinez, associate professor of business statistics in the Monfort College of Business, said oil and gas production in Weld County and Colorado alike declined in 2013 due to lower oil and gas prices. He believes, however, that oil and gas production ultimately will rise beyond the record set in 1957.
“We will reach it sometime in the future,” Martinez said.
Doug Claussen, a certified public accountant with Kennedy and Coe LLC, forecasted growth for cattle ranching and challenges for dairy farmers as milk prices fall. Crop farming will be less profitable as crop prices fall.
He predicted that farmland values would decline, though they have continued to rise in recent years.
“I don’t know if land can continue to go up forever,” he said.
The land market made history in 2007 with 22 transactions totaling $337 million in Northern Colorado, according to Ehler. But in 2009, the market dove headlong into the recession, with just 53 transactions valued at $84 million.
2013 marked a year of progress in the land sector, Ehler said, with 126 transactions totaling $177 million. Land should continue to improve in 2014, led by multi-family tracts in Fort Collins, and single family lots market-wide.
Commercial real estate in general is a mixed bag, with multi-family projects springing up in order to meet ever-present demand, but retail and office developments are slower to rebound.
Part of the difficulty with new real estate development stems from difficulty with financing, but Guaranty Bank & Trust Greeley-Eaton Market President Mike Bond expects that loan levels will grow in 2014 as more banks return to profitability.
Mergers and acquisitions will continue in the banking world, especially for community banks. There have been 22 mergers or acquisitions in Colorado in the last five years, Bond said, and most of that activity has taken place outside of the Denver metro in regions such as Northern Colorado.
Other trends in banking include decreased branch counts as banks close branches and instead incorporate new technologies into their business models.
Banks will also have to spend more money to come into compliance with new regulations, Bond said, as new rules passed down from the federal government take effect.
Another industry adapting to changes in federal regulations is health care, in which reform has caused many providers to re-evaluate their practices and make changes to adapt to the larger rolls of insured people resulting from the Patient Protection and Affordable Care Act.
Many people who were only episodically insured before are now insured continuously, according to Jandel Allen-Davis, vice president of government and external relations for Kaiser Permanente.
But enrollment in the newly formed health care exchanges, both nationally and on a state level, has fallen short, Allen-Davis said. Connect for Health Colorado, the state’s health insurance exchange, has enrolled about 52,000 people as of Monday, Allen-Davis said. This number falls within the expected range set forth by exchange officials last year, but represents an increase of only about 1,000 people since Dec. 31, when the exchange had enrolled 51,728 people.
In addition, only about 15 percent of the people who have enrolled in the exchange nationwide have been what are referred to as “young invincibles,” or the population of healthy young people whose premiums were expected to subsidize the cost of older, more expensive enrollees.
But Allen-Davis expects that there will be an uptick in exchange enrollment as the open enrollment period progresses. Open enrollment on the exchange lasts until March 31.
Allen-Davis also considers the recent news about declines in health care employment to be a “blip,” especially for Northern Colorado, where three of the top five private employers are health care systems.