The economic outlook for Greeley and Weld County looks uncertain for 2015 thanks to fluctuating oil prices, experts said at the annual BizWest Economic Forecast event.
Business leaders from across the region gathered Wednesday at the University of Northern Colorado’s University Center Ballroom to hear what is in store in the areas of real estate, agriculture, health care, transportation and manufacturing.
Keynote speaker Martin Shields, director of the Regional Economics Institute at Colorado State University, said this is a strange time to talk about an economic forecast because low oil prices are causing a great deal of uncertainty in northern Colorado, specifically Weld, where 50 of the state’s 70 operating oil rigs are located.
Still, Shields said northern Colorado has come a long way since December 2007, when the area started to see an economic decline.
“Now we finally get our legs under us and this oil thing happened,” he said.
He said the current price of oil makes it hard to put Weld into any of the economic prediction models that he has.
“For the oil industry, which has been the economic driver here in Weld County, there’s a lot of uncertainty,” Shields said.
The important question now is, “When does oil production become unprofitable?”
Although the current oil prices hovering around $45-$46/barrel haven’t directly affected Weld yet, if prices stay this low, it will, Shields said. He said layoffs have already begun in other parts of the country. In Colorado, eight rigs have stopped production, none of which are in Weld.
Weld County has low production costs, he said, which means the industry stays profitable to a lower price point.
If the cost bounces back up, Weld could potentially escape the decline unscathed, but the amount per barrel that oil would have to rise to remain profitable is contested. He said some say to make it profitable again, the price would have to rise to somewhere from $55-$60 per barrel, while others say production is profitable in Weld as low as $47/barrel.
Shields said that while Larimer County’s economic rebound has been based in a few different industries such as construction and health care, Weld’s has primarily revolved around the oil and gas industry, which makes Weld more susceptible to the economic impact of an industry downturn.
Speakers form a variety of other industries discussed their view of 2015:
Michael Ehler, a broker/partner with Realtec, said there are number of things of positives in real estate in northern Colorado for 2015.
The region’s vacancy rate is below 6 percent, which drives real estate prices up. Planned projects in Weld, including the Evans redevelopment project for the U.S. 85 corridor. Weld County’s plan to consolidate government operations in Greeley’s growing downtown area — including Weld County’s recent purchase of the Chase building — also is seen as a positive reinforcement for future commercial real estate.
“Greeley is going to make it through this temporary blip,” Ehler said.
Brian Kuehl, director of federal affairs for K-Coe Isom, a northern Colorado accounting firm, said the face of agriculture is changing.
The demand for local food and agriculture is growing while the affordability of being a farmer is falling, he said. For that reason, northern Coloradans can expect some changes.
Larger operations will get larger, Kuehl said. Additionally, residents should expect farm consolidation and for technology to become more important as a younger generation takes over.
Jandel Allen-Davis, vice president of government and external relations at Kaiser Permanente, said 8 million people enrolled in health care last year, with 121,000 of those in Colorado.
So far, about 5,000 in Weld County have enrolled for 2015, and enrollment ends in February.
While those numbers are great, she said there is still room for improvement, specifically for insuring minorities.
Uninsured rates dropped significantly among African Americans last year, she said, but still about 30 percent of the Latino population remains uninsured.
A big reason people aren’t getting insurance is because it’s still not affordable, she said.
In Weld specifically, Allen-Davis said there is a higher obesity rate than a lot of other counties in Colorado. She said the amount of smokers, physical inactivity and alcohol driving deaths also are higher in Weld than other areas.
There are three big hills to overcome in 2015, she said: Creating a workable system, making the nation healthier as a whole, and mental health.
David May, chairman of the Fix North I-25 Business Alliance, said the group started the alliance to advocate for a third lane on Interstate 25 from Colo. 66 at Mead to Colo. 14 at Fort Collins.
He said the goal is to make the improvements by 2025 because current projections show that Larimer and Weld counties will have about 1 million people by 2040, as compared to the 500,000 who live in the area today. It will cost about $1 billion to make the additional lane happen, so he said the group intends to keep attention on the issue to put “gentle pressure on the people who can fix it.”
This article was written by Bridgett Weaver from Greeley Tribune, Colo. and was legally licensed through the NewsCred publisher network.