Economy receives thumbs up for 1998

Economy receives thumbs up for 1998

Christopher Wood

Business Report Editor

The Northern Front Range’s economy should post positive gains during 1998, with some warning signs in real estate, banking and health care.
International monetary crises, too, could damage the U.S. economy, experts say, possibly filtering down to the Northern Front Range. One economist even predicts a national recession before the year 2000.
But with retail sales continuing to boom, residential sales and home building still strong and a continuing explosion of commercial and industrial development, it would take a national or international calamity to dampen the economy of this region. And it takes several quarters of economic decline to constitute a recession, so don˜t look for one any time soon.
"Growth in the Northern Colorado economy will likely remain strong in 1998, stronger in some areas than in 1997," said John Green, a consultant and economist with the University of Northern Colorado in Greeley. Green just completed the latest installment of the 1st Choice Bank/Northern Colorado Business Report Leading Economic Indicators. His economic forecast can be found in his "On the Economy" column in this issue.
Here are some highlights for the Northern Front Range˜s economy:
Unemployment is likely to remain extremely low. It˜s already reaching virtual full employment, an ephemeral term that indicates that anyone who wants a job can find one.
That contributes to an ever-tightening labor market, with every sector from retail to manufacturing, high tech to construction, health care to banking complaining of a lack of skilled and entry-level workers. Such a shortage already is beginning to push up wages locally.
In real estate, Fort Collins stands to see a glut in office space caused by rapid new construction, plans for a federal campus that will force agencies to vacate commercially leased space and move into a new federal center, and the new Larimer County courthouse project, which will likewise consolidate workers, freeing many from leased space.
Look for inflation in health care, with premiums for health insurance certain to go up in 1998 and 1999 as managed-care companies seek to improve their margins and stop subsidizing Northern Colorado˜s more-expensive care with premiums from elsewhere in the state.
In banking, branches are likely to continue to pop up, especially in retail locations, with bankers seeking new ways of delivering services. But warning signs nationally concerning high consumer debt, increased foreclosures and more nonperforming loans could be felt locally.