Last Friday morning, about 600 local business and civic leaders gathered downtown at the Antlers Hilton to learn what they might expect from the economy in the year ahead.
They left four hours later, many wearing quizzical expressions, probably because they came away without anything that resembled a clear message from the annual Southern Colorado Economic Forum.
The group first heard a keynote speech from Jim Paulsen, the chief investment strategist of Wells Capital Management, which merely manages $325 billion in funds. Paulsen, who works out of Minneapolis, flew in for the third straight year to address the local forum.
It might be hard to find a more optimistic person on the planet.
Paulsen started out by saying this: "There's far too much panic in this country. ... We continue to hear Armageddon stories, but the market in the last three or four years has had the highest return of any time since 1945." He thinks unemployment will continue heading downward into next year. He's convinced Congress will prevent the nation from slipping off the much-publicized "fiscal cliff" of budget cuts and expiring tax cuts.
He even drew a belly laugh from the crowd, saying his outlook wasn't dependent on the outcome of the presidential race between Barack Obama and Mitt Romney.
"Whoever wins this will be considered a great president," Paulsen said. "It won't matter who it is."
Then, after 30 minutes of happy talk, local economists Fred Crowley and Tom Zwirlein of the University of Colorado at Colorado Springs took turns giving their forecast of what to expect in the Pikes Peak region.
To call their outlook gloomy would be an understatement.
For every point that Paulsen made about jobs opening, banks lending, and the U.S. markets becoming less sensitive to what happens in Europe and Asia, Crowley and Zwirlein had their own concerns.
Crowley did report that new car sales are up, foreclosures are down, and the housing market is looking better going into the slow winter months. But he spent much more time amplifying on the fact that actual employment is down this year in Colorado Springs. "That's terrible. We haven't grown new jobs at all," he said, particularly in manufacturing. He also pointed out that aside from building materials and new cars, other sales-tax revenue is down.
Crowley's solution also included his strongest criticism. Oil and gas drilling in Banning Lewis Ranch and other eastern El Paso County locations could make a difference, he insisted — and he chastised the city for, in his view, going too slowly in approving regulations that would allow drilling to begin inside city limits. He sees the drilling as potentially producing up to 1,500 jobs a year for 10 years — though, obviously, that's dependent on local wells turning into long-term producers.
Zwirlein, for his part, hammered on the theme that "we've lost our manufacturing base and we have to replace it with something else." It could be drilling, he said, or perhaps the rebuilding of Mountain Shadows after the Waldo Canyon Fire. But each time, he had to say, "We just don't know."
Zwirlein's biggest fear, though, was that fiscal cliff, in particular the forced federal budget cuts from sequestration, which he said could take away as much as $550 million from the military and defense contractors in El Paso County.
"And that," Zwirlein added, "could be devastating to the local economy."
Their actual local forecast called for slight improvement, with one glaring exception. As for the category of non-agricultural employment growth, Zwirlein and Crowley predicted a flat year, 0.0 percent change, which is a far cry from Mayor Steve Bach's desire to create 6,000 new jobs annually for the next few years.
So now you know why the many attendees at the Southern Colorado Economic Forum walked away with mixed signals bouncing in their heads.
Obviously, the No. 1 worry for Colorado Springs has to be sequestration. If it happens, we're looking at a tough road ahead — no matter what's happening to the rest of the country. If Congress stops it in time to avoid the fiscal cliff, if local drilling succeeds and other pieces fit into place, we could fare much better in 2013 and beyond.
Yes, no matter who is the president.
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