With a strong entrepreneurial environment, expanded infrastructure, and a talented workforce, Metro Denver is poised to achieve new economic milestones in the upcoming year, according to the 2016 Metro Denver Economic Forecast presented today at Vectra Bank’s 23rd Annual Economic Forecast breakfast. The event took place at the Seawell Grand Ballroom of the Denver Center for the Performing Arts.
The 2016 Economic Forecast for the seven-county Metro Denver area was presented by Patty Silverstein, chief economist for the Metro Denver EDC, and reviews the events of the past several years as well as highlighting emerging trends for this year. The forecast includes national-level analysis and estimates for the state economy as well.
“With all indicators considered, Metro Denver will continue to perform better than the national economy and will expand at a faster than average pace in 2016,” said Silverstein.
Compared with the national average, Metro Denver’s employment growth in 2015 was more than 1.1 percentage points higher at 3.2 percent, which included gains in each supersector except information. Silverstein forecasts Metro Denver’s job growth in 2016 to be 2.9 percent, which represents the addition of about 45,000 jobs.
According to Silverstein, four supersectors of the regional economy should post strong employment growth in 2016: natural resources & construction (4.2 percent), education and healthcare services (4.1 percent), professional and business services (3.9 percent), and financial activities (3 percent).
“The diversity of our industry base is what drives Metro Denver’s economy,” explains Tom Clark, CEO of the Metro Denver EDC. “The way we’ve transformed our oil and gas-dependent economy of the 1980s to our current balanced energy focus with fossil fuels and cleantech is a perfect example of how a concerted industry strategy bears results.”
Strong job growth in 2015 pushed down Metro Denver’s unemployment rate in October to 3.1 percent, the lowest rate since November 2000. While unemployment increased slightly in November, the rate remains at levels not seen since 2001.
“With a forecasted average unemployment rate of 3.5 percent in 2016, our companies will continue to see a very tight labor market,” said Silverstein. However, she notes that the region will still benefit from strong in-migration, especially among Millennials.
The forecast also highlights that with limited supply in the residential real estate market and above average population growth, Metro Denver home prices will continue to rise and construction activity will continue at a quick pace, but the market will be constrained due to limited inventory in 2016.
“We are definitely watching our housing market and are advocating for more affordable options through construction defects reform,” said Clark. “With new developments planned along new light rail lines across the region, providing housing options for our workforce is an important aspect of our region’s renaissance.”
The forecast for Metro Denver includes the seven counties of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson. Economic indicators analyzed include: population trends, employment by industry, unemployment, retail sales growth, commercial real estate, and residential activity.
Learn more:
» 2016 Economic Forecast for Metro Denver (national, state, and regional forecast, PDF)
» 2016 Economic Profile Brochure for Metro Denver/Northern Colorado (PDF)
Janet Fritz is the senior director of marketing and technology for the Metro Denver Economic Development Corporation.
This report was originally published to the Metro Denver Economic Development Corporation’s website, you can view the full report here.