Recovery of economy a ways off, expert says
Weak energy industry, banking and commercial real estate prospects may hold Colorado back from economic recovery any time soon, according to economist Mark Snead.
Snead, the branch executive in Denver for the Federal Reserve Bank of Kansas City, spoke
Tuesday evening during an economic forum at Two Rivers Convention Center. A cold winter may help natural gas prices and benefit Colorado energy companies, Snead said, but it’s unlikely the market will turn around quickly.
“There really is nothing in this data to suggest Colorado will bounce out of this quickly. In fact, (Colorado) may lag significantly,” Snead said.
Snead said he expects retail vacancy rates to continue to rise in Denver and Colorado, and that commercial construction, although on the rise since the middle of summer, has devalued significantly.
Residential real estate in Colorado, however, likely hit bottom in the spring and has been on the upswing for four or five months, Snead said. Both the number of homes selling and the prices they sell for has increased here.
Banking, meanwhile, is another story. An upswing in that sector, Snead said, will take a while.
The ratio of nonperforming assets to total assets is higher in Colorado than the U.S. average.
The ratio is unlikely to accelerate any more, Snead said, but it’s “still not moving in any meaningful way. You will be well behind the U.S. recovery. It’s a little depressing.”
There is hope, though. CNBC recently ranked Colorado as the third best state in the nation for doing business, and MSNBC named Colorado this summer as one of the five states most likely to experience economic recovery first.
Gov. Bill Ritter showed confidence in the state’s prospects Monday even as he commented on a budget shortfall totaling more than half a billion dollars.
“Our economy is still in better shape than many other states. Our economic-development strategy is working,” Ritter said.
Colorado has outperformed the U.S. in job growth during the past five years, but job growth in the nation has outdone the state this year.