As temperatures in the Rocky Mountains have been dipping, I have been curious how the thermometer on Colorado's economy is reflecting the nose-dive in commodity prices this year.
How "cold" is it, exactly?
We have previously discussed the real life impacts and the human toll associated with deflated oil and gas prices, including layoffs, the reduction in rig counts, closure of several oil and gas company's Denver offices, decisions to down-size work forces and the collateral effects of the downturn in oil on small businesses and many service industries.
5280 Magazine recently ran an article that caught my eye while I have been considering these impacts: "Will Big Oil Tank Colorado's Economy – Again?" They report that the good news is that while many have a sense of déjà vu from the bust of the mid-1980's and this year's falling oil prices have certainly hurt the Colorado economy, it likely will not end in catastrophe this time.
It is reported that more than 90,000 domestic oil workers have already lost their jobs, but the good news for Colorado is that the state's reported $280 million economy is the fifth fastest growing in the country, with the oil and gas sector only account for 11% of that. Although production is high, in fact, according to The Tribune, "production growth for Weld County this year is on track to top 100 million barrels of oil," this time around, Colorado's economy is more diversified than it was in the mid-1980's.
So while the temperature is frosty and chilly in Denver, it is good news that those "in the know" are predicting that the impacts of this downturn will not be as bad as the previous bust in the mid-1980's.
However, the forecast for commodity prices is still largely unknown – the price of oil is currently at $41.54.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
