Colorado Springs Financial Briefs: February 1, 2008

The dreaded R-word is being bandied about these days by pundits, consumers and business owners, but is it really all that bad?

Yes, and no.

"People are terrified of recessions, but recessions aren't what they used to be," said Michael J. Swanson, senior economist at Wells Fargo Private Bank's Focus 2008 panel discussion last week at the Fine Arts Center. "Businesses are better at controlling inventory to avoid excessive ups and downs -- they have supply-chain vision."

And, of course, recent Federal Reserve interest rate cuts and the impending economic stimulus package also will help.

For the long term, energy prices, though volatile, will likely go down, Swanson said, and oil is likely to average closer to $70 per barrel than $100. While commodities prices -- steel, crude oil, natural gas -- will be high going forward, they are overdone and will fall.

"Prices are outstripping the ability of consumers to purchase it," Swanson said.

The bad news, of course, is inflation. Last year saw the highest inflation in food prices since 1991, and 2008 will set another record.

"I think the Feds will be struggling with inflation at 2.5 percent to 4 percent for several years," Swanson said.

Vectra's economic outlook

Bruce Alexander, president and chief executive officer of Vectra Bank Colorado, is optimistic about Colorado's economy, despite gloomy national news.

"Our home prices and inventories have appreciated reasonably in the past five years," he said. "Housing prices did not escalate as dramatically as in California, Florida, Arizona and other states, so values won't depreciate as much (here) as other parts of the country."

Colorado's tourism, transportation and technology sectors are strong and will continue to grow. Denver International Airport is a hub for the western United States, an asset which benefits the economy along the Interstate 25 corridor from Fort Collins to Pueblo.

"National numbers are a little scary, but local prognosis is pretty positive," Alexander said. "Colorado's vital signs are positive. We have amenities that will draw employers and we're probably growing faster than other states with supply and demand for renewable energy. Stable housing prices and consistent population and job growth will protect us."

Seminar for leaders of medium-sized businesses

A Private Capital Market Conference for medium-sized business leaders will be held from 8:30 a.m. to 4 p.m. Feb. 5 at Cheyenne Mountain Resort.

Sponsored by BiggsKofford, The Jenson Group at Smith Barney and U.S. Bank, the seminar will focus on "What They Didn't Teach You in Business School." Topics will include "Methods to Exit Your Business" and "In Search of the Midas Touch."

A panel of international trade experts will offer strategies and local business owners will share information about how they have expanded their business with international trade.

For more information, contact BiggsKofford at bkc@biggskofford.com or 579-9090.

Copyright 2008 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.