January 6, 2023

Wood: A mixed picture for 2023

2023 presents a somewhat blurry picture for the economy of the Boulder Valley and Northern Colorado.

As the Federal Reserve raises interest rates in an attempt to cool inflation, the impact is being felt across the economy, from banks to housing and beyond. It’s simply become more expensive to borrow money, presenting challenges for businesses and consumers alike.

And there are some negative signals in the economy, including two high-profile bankruptcies affecting the Boulder area:

• Clovis Oncology Inc. (Nasdaq: CLVD) filed for Chapter 11 bankruptcy protection in December, with plans to sell a key drug asset. Clovis once had a market value of $3 billion.

• Medly Health Inc., which acquired Boulder-based Pharmaca Integrative Pharmacy Inc. in late 2021, also filed for bankruptcy protection in December, with plans to sell the Pharmaca chain.

Additionally, the latest gross-domestic product numbers — released at the county level in December — reflect a second consecutive year of economic decline for Weld County. The data from 2021 — the latest available — showed that Weld’s GDP declined by 6.7% in 2021, following a decline of 6.6% in 2020.

That can largely be attributed to declining energy prices of that two-year span.

On the positive side, Boulder and Larimer counties showed robust 2021 GDP growth — at 7.9% and 7%, respectively. Broomfield grew by a more-modest 3.5%.

And while bankruptcy and foreclosure numbers have been increasing in certain areas, they are far below the disastrous numbers seen during the Great Recession.

We’ve also seen some layoffs, with Twitter Inc. slashing its global workforce, including in Boulder, where it faces eviction from an admittedly vacant office downtown, with its central Boulder office largely dormant as well.

Additionally:

• Genetic-editing company Inscripta Inc. laid off 43 workers in Boulder as it announced the closure of its local headquarters

• Greeley-based JBS USA announced that it is shutting down Planterra, its Lafayette-based plant-based foods unit, eliminating 121 jobs.

• Sparboe Cos. announced layoffs of 95 workers at its Hudson-based chicken-egg operation. The bird flu caused that one.

• Good Samaritan Society — Bonell Community shut down in Greeley, eliminating 143 positions, as the site is being transitioned to apartments.

At the same time, real estate continues to be developed, with industrial, warehouse and distribution, and life-sciences projects announced seemingly weekly. Mergers and acquisitions continue to occur, such as Loveland-based Heska Corp. (Nasdaq: HSKA) acquiring Boulder-based MBio Diagnostics Inc, which does business as LightDeck Diagnostics.

So where is the economy headed? Just as, during the height of the COVID-19 pandemic, when some industries flourished while others struggled, it’s likely that we’ll see a similar trend in 2023.

Expect to read articles about layoffs, bankruptcies and foreclosures, but also about low unemployment, new real estate projects, and mergers and acquisitions.

A little something for everybody.

Christopher Wood can be reached at 303-630-1942 or cwood@bizwest.com.

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