7 Economic Signs for a Rich 2015

Friends– I was asked to write an “economic outlook for 2015”  for our local “50 and Better” magazine,” Alas, it’s hard to find the article online. (Fifty and Better is a slick print publication.) And I know youo all must be dying to read it. So here it is:

2015: Seven Signs for a Good Year

Seven economic signs show that 2015 could be the best year ever for most people in Northern Colorado. However, for oil drillers, hedge fund managers and owners of gas station syndicates, these same signals indicate that 2015 could be a bit challenging. Still, for most people in Northern Colorado, especially those aged 50 plus, 2015 already promises a year of increased prosperity, deeper solvency and growing opportunity.

Sign # 1: Lower Oil and Gas Prices

A gallon of gas is 40% less than at this time last year, averaging $1.98 a gallon today vs. $3.22 last year. Lower gas prices are obviously more helpful for lower and middle income people, especially those owning a recreational vehicle, who want to make road trips or just spend less getting to work. Lower prices also allow extra cash for specialty groceries or an extra restaurant meal and a movie. Maybe even to pay down some credit card debt.

The airlines also fill up for less, so air fares should remain stable, or even fall lower, due to cheaper cost of aviation fuel. For those traveling, the cost of motels, hotels and restaurant meals should remain fairly economical throughout 2015 due to lower costs for heating and powering these facilities.

Sign # 2: Increased Global Connectivity

               Lower oil and gas prices are obviously not just a local phenomenon but rather the result of factors around the world, including decreased demand from China, turmoil in the Middle East and worldwide application of new technologies in oil extraction.  Northern Colorado is increasingly  intertwined with almost all facets of the world economy.

Following national and global trends, more northern Colorado residents do more of their shopping via their computers. For example, nationally, over $2 billion was spent on a single day  (“Cyber Monday”) in the past 2014 Christmas season, which was a 25% increase  year over year. And Amazon, the world’s largest online retailer, is now experiencing serious competition from Ali Baba, the Chinese equivalent, bringing even lower prices to consumers, and allowing direct shopping from China and India to Northern Colorado. Although this puts pressure on local businesses now using tools like this software that creates template for pay stubs so you can pay employees, the emerging “global economy” is a boon for lower and middle income people.
Sign # 3: Continued Low Interest Rates

Current thirty year fixed rate mortgages in Northern Colorado range between 3.4% to 3.9%  with adjustable rate mortgages as low as 2.7%  Loans for new cars are hovering around 3%, though some  dealers are making 0% deals for high end models. The exception to low interest rates is, as usual, the interest rates on credit cards, though even these are held stable by the generally low rate climate.  Although some economists predict interest rates will rise this year while others say no, the current low interest rates benefit the ordinary consumer, as well as home builders and auto dealers.  Banks have to cut their margins, but they still play the middle man.

Sign # 4:  Rising Wages, Home Prices and New Commercial Building

The Business Research Division at CU’s Leed’s School of Business reported that the price of houses in both Larimer and Weld Counties rose approximately 9% over the past 12 months. Although this puts further strain on low-income people in need of affordable housing, middle income people who own homes find their net-worth growing.  Home builders are hiring and purchasing materials to meet the demand for new homes.

Colorado State University economist Martin Shields expects the unemployment rate in Northern Colorado to drop to around 3.5% with a corresponding rise in basic wages due to fewer people looking for work. He also points out that new commercial construction projects, including an $86 million hospital planned by Banner Health and a $12.3 million emergency center by University of Colorado Health, will buoy the region’s economy.

Sign # 5: Immigration Reform and New Businesses

Although legislative action on immigration reform appears stuck in seemingly endless political bickering, President Obama’s executive action on immigration allows parents of American citizens or legal resident children who have lived in the U.S. for more than five years relief from deportation if they register with the government, undergo background checks, and pay taxes.  Especially here in Northern Colorado this action helps stabilize the work force, bringing more long time workers onto the tax roles, and even more importantly, allow for the new business start-ups.

According to a study recently released by the Fiscal Policy institute, between 2000 and 2013, immigrants accounted for all net Main Street business growth nationally and in 31 of the 50 largest metropolitan areas in the country.  Obviously, immigration reform will be good for the Northern Colorado economy and, as the White House put it,  “It will also allow immigration enforcement officials to focus resources on deporting felons, not families.”

Sign # 6 New Businesses  

According to World Bank Group’s, “Ease of Doing Business” rankings, Colorado ranks first in the nation as the best state in which to start a new business.  Reasons to start a business here include a decreasing crime rate; a great climate for winter sports enthusiasts; Colorado’s top ten rating for small business friendliness; and, according to the Denver Chamber of Commerce, the second most educated workforce in the country. If you want to start you own new business, we recommend to get some tools at https://www.paystubcreator.net/.

Sign # 7: Increased Marijuana Taxes

         And finally, the new tax revenues from  both recreational and medicinal marijuana continue to climb, increasing by large margins each month, adding to the tax base in both Larimer and Weld, though more so in Larimer than Weld. ($176,096.00 collected in Larimer and $121,354.00 collected in Weld for the most recent month in which figures are available.)  Although still in its infancy, this new “industry” brings more people to the state, and revenues to the county coffers. Curiously, some research indicates that a large percentage for both medical and recreational marijuana sales are in the 50-plus age bracket.

Contrary to many doom and gloom analysts, the 2015 economic outlook for Northern Colorado continues to brighten.  From across the country and the world, people want to live, visit or do business in this land of growing opportunity.

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