Forecast 2012: ‘steady’ economic improvement

BOULDER – The Boulder Valley should see slow but steady improvement for the regional economy in 2012, although potential funding cuts at federal labs may create a dark spot on the horizon.

That was the word from economist Richard Wobbekind of the University of Colorado, Boulder, and four community leaders who spoke at the Boulder Economic Council’s 2012 Forecast: Boulder and Beyond, held Jan. 27.

Ric Porreca, chief financial officer at the University of Colorado, Boulder; Cindy Schmidt, director of the office of government affairs at the University Corporation for Atmospheric Research; Jane Brautigam, Boulder’s city manager; and Susan Graf, president of the Boulder Chamber; also spoke.

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Boulder is slightly ahead of the curve of the rest of the state in several statistical areas, Wobbekind said. In addition, federal labs based in the city and the heavy emphasis on research at the University of Colorado have created a strong base for funding that has been somewhat resistant to economic factors at play in other parts of the country, panelists said.

There’s uncertainty about how future federal budgets may be used to fund federal labs in the future, however, Schmidt said. An estimated $1.5 billion annually goes into the Colorado economy from the 1,600 direct and indirect jobs created by labs such as the National Oceanic and Atmospheric Administration in

“The White House is interested in promoting university labs and private-sector collaboration, so that’s good,” Schmidt said.

Companies laid off some employees in the professional services and information technology sectors when the latest economic recession hit, and the rehiring curve so far in the recovery has been slower than it was in previous recoveries, Wobbekind said. Such jobs make up an estimated 23 percent of the total employment picture in the region, Wobbekind said, giving IBM Corp. locally as an example of professional services jobs.

“We’re very dependent on high-tech jobs,” Wobbekind said. “We have the stability of the labs and the university, but those are not areas of big growth.”

Of concern to economists is the growing wealth gap between more educated people and less educated people in the United States, Wobbekind said. That’s expected to continue, both locally and nationally, he said.

In the Boulder region, 57.5 percent of residents over age 25 have a bachelor’s degree. Colorado is the second-highest educated state in the country, Wobbekind said.

“There has been a tide that lifted all boats … since the 1980s time frame,” Wobbekind said. “As income rates have fallen, and unemployment rates have risen, we have seen a much more bi-modal economy of the educated versus the less educated.”

On the other side of the coin, companies such as DigitalGlobe Inc., Ball Aerospace and Technologies Corp., Google Inc. and Trada Inc. all have scrambled to hire additional employees in recent years, Graf said.

“Software engineers are a desperate need,” Graf said.