This month I was very lucky to sit down for coffee with Laura Blomquist Rodriguez from the Colorado Office of Economic Development & International Trade (OEDIT).
I asked her a few questions that a lot of my clients ask me all the time about the Denver growth and the economy. As well what we should see for the growth of Denver’s future. And the situations for millennials right now in the Denver area. Here some inputs about our great state and all strength that we have, not just our amazing weather and the great outdoors but much more that makes Colorado a top destination in our country!
Why Denver is growing so much?
During the recession, Colorado economy didn’t decline to the same extent as the nation as whole. Denver’s housing market wasn’t as volatile and city suffered less job loss than what was experienced nationally. During the recovery, we recovered at a faster paced in many economic indicators. This year, the State Demographer’s Office is estimating 53,000 net migrants in Colorado - that’s including people leaving and coming. This large growth follows several years of strong migrant growth and population growth. In 2018, the population growth is estimated to reach 1.4% which is twice as much as the nation as a whole. This fast population growth is a trend the state experience throughout the recovery. A large portion of the growth is coming from millennial migration.
Why is that?
During the 70’s and 80’s, Colorado was primarily an oil and gas based economy. During the recession in this time period, the state suffered a significant amount of job loss. However since then, we have diversified our economy tremendously. In addition to oil and gas jobs, now we have software development and tech, medical device manufacturing, advance manufacturing, and health care. One of our biggest industry is professional and business services, which includes everyone from software developers to architects and engineers. This is very important industry for the state as we have a lot of jobs in this industry and they command high wage jobs. In my department, we are working with many companies that are looking to expand in the state or relocated to the state. For example we worked with Strava, a San Francisco based application that connects cyclists and runners, and they open their second headquarters in Denver as there was a concentration of tech talent in the city. We also worked with BP as they relocated their BP Lower 48 headquarters from Houston to Denver as they plan to reinvent their company and hire more tech talent.
Because of our growth, we are experiencing cost increases, specifically in housing. However, business that are interested in relocating or expanding to Colorado or families that are coming from the coasts, generally consider Colorado a lower cost market. This movement from the coasts is not unique to Denver. We are seeing populations grow in places such as Austin, Portland, and Salt Lake City. These locations have very similar in cultures, lifestyles and economies.
When we talk about talent, Colorado is the 2nd most educated state (people with a Bachelor’s Degree or higher) per capita following Massachusetts. As we have a diversity of the jobs and industries, we are able to attract highly educated individuals to the state. Couples and families can easily move to the state know that their partner will be able to find a job in the diversified economy. Ultimately, this diversity dives growth in the private sector and job growth. With one of the highest GDP’s in the country, not only is talent attracted to Colorado but so are entrepreneurs. It is not just the lifestyle, like many of us think, that attracts people but it is the combination of industries and economic ingredients that provide opportunities. That’s why people are attracted to Colorado.
What about the fears that Millennials have regarding debt and affordability?
Yes, it is true that Millennials carry significant debt from student loans. This makes it a challenge both in Colorado and nationally for this generation to purchase their first home. Additionally, Millennials prefer to live in urban areas, however, these are the least affordable locations. The condo market is rather limited in Denver, though there is growth, also making it a challenge for young adults to purchase their first property. Also, as baby boomers decide to downsize, they are competing for the same size homes as Millennials. In other words, there are many factors at play that are creating challenges for Millennial home purchasing.
If you think about Denver separated from the United States, if there is a downturn, do you think Denver will be affected as much as the rest of the country?
Going forward, we do expecting a slowdown as the typical business cycle is 10 years. However, we don’t know what form the slowdown will take. For example, a downturn in oil and gas and tech, would have a very large impact on Colorado’s economy. When we saw the oil prices fall in 2014, we saw slower economic but still positive growth as tech was able to pull the economy ahead. Typically, Denver and Colorado fair better than the country, however, during the dot.com bubble in the early 2000’s, Colorado was greatly impacted. Nonetheless, it is very challenging and nearly impossible to predict a downturn.
Shall we expect some big company moving to Denver?
Denver is an attractive location for company expansion and relocation. Last month, VF Corporation, a worldwide apparel and footwear company that includes brands such as Jansport, Eastpak, Smartwool, Timberland, and North Face, announced that they were relocating there headquarters here. In OEDIT, we work every day with companies that are looking at Colorado as a possible location for their operations. Some decide to set up shop in Colorado and others do not.
Something else you would like to mention?
Yes. After the Great Recession, the Northern Front Range recovered at a faster pace than many parts of Colorado. There has been an inequality in economic growth across the state and this is something that people should be
People should be aware that there is a difference between the metro area and rural Colorado, Denver has seen such a big growth Boulder, fort Collins, Colorado springs other part of the states have not seen such a big growth. There is an inequality in growth that is something to be cognizant of.
Laura is the Senior Manager - Strategy & Analytics in the Global Business Development Division, she have been working for the Governor for the last 6 years in various roles. Currently she works provides data to companies that are looking to relocate or expand to Colorado!
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