The lingering effects from the COVID-19 pandemic, including inflation and malfunctions in global supply chains, are likely pushing Southern Colorado and the U.S. into a recession in 2023.
That was the assessment from economists Thursday at an annual economic forum held in Colorado Springs.
Whether the country is already in a recession is a little more difficult to say with certainty because of continuing positive economic factors such as strong job growth and a low unemployment rate in the region – as well as in much of the nation, said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.
Bailey gave an overall assessment of the national, state and Colorado Springs economies to a packed house at the Ent Center for the Arts on Thursday.
She said the Colorado economy is facing many troubling trends, such as above average cost of living, overpriced housing and a lack of qualified workers for many of the state’s most in-demand jobs.
In Colorado Springs, for instance, Bailey pointed out less than a quarter of homes for sale this year could be affordably purchased by a family earning the local median income. That number is nearly 43% for the nation as a whole.
Still, Bailey predicts Colorado will outperform the nation as a whole economically through next year.
“(Colorado) is still growing, still (as) young and educated people. We’ve become more of a destination for knowledge workers, with remote work,” she said.
Bailey also said stable and robust tourism is helping the state, along with a lot of growth in sectors such as defense, finance and health care.
Even with these positives, Bailey still predicts the gross state product – a measurement of the value of all industries and goods in the state – will grow just half a percent next year. But, that’s slightly above her prediction for how the national gross domestic product will perform overall, which she said may only grow 0.2%.
Another economic report, from the Colorado Futures Center, also predicts growth of less than 1% by the start of 2023.
Bailey surmised that humanity is going through three massive and historic transitions all at the same time: the transition to sustainable energy sources, modernizing global food production processes and profound demographic shifts as the birthrate in richer countries is falling quickly while still increasing in poorer countries, particularly in Africa.
Bailey said the scale of these problems are now affecting both short-term and long-term growth projections.