Is Colorado Springs positioned to endure inflation, economic downturn? Panel speaks.

Jessica Van Dyne, The Gazette (Colorado Springs, Colo.)
·3 min read

Jan. 27—High inflation, increased interest rates and negative consumer and manufacturing surveys do not bode well for Colorado Springs' economic outlook, but the city could be well-positioned to weather a potential downturn.

Local economist Tatiana Bailey, Colorado Springs entrepreneur Kevin O'Neil and Colorado Springs Chamber & EDC President and CEO Johnna Reeder Kleymeyer discussed how the city can endure a recession during a panel Friday for midsize business owners hosted by Peak Executive Forum, a nonprofit that holds five events a year aimed at educating and engaging business owners.

"When I think of 2023, I think it's an accommodative year ..." Bailey said. "We had this big shock in 2020, even into 2021, and then all the fiscal stimulus and the interest rates coming down ... and that was kind of a bolster. And now what are we doing? We're coming off that."

"If we can make this accommodative year relatively smooth, we might get a soft landing," Bailey said.

Labor numbers also have sent a positive message with the creation of 223,000 jobs in the U.S. in December, Bailey said, and Colorado is below the national unemployment rate at 3.3%.

But when it comes to the labor market, Colorado's participation rate is below the national average of 0.6 available workers for every job opening.

"We have an even tighter labor market here," Bailey said.

Meanwhile, leading indicators such as gloomy consumer and manufacturing surveys are pointing to a hampered national economy.

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Friday's panelists expressed hope for Colorado Springs' leading industries, such as the defense industry, to be an asset in this economic climate.

"Our DOD (Department of Defense) runs countercyclical to a recession in many respects," O'Neil said. "I do think the conflict internationally will keep them funding the DOD budget ... it's going to insulate us."

The expansion of Entegris in Colorado Springs, a global supplier of electronic materials that support the semiconductor industry, highlights the rise of semiconductor manufacturing in the U.S. — only one of two manufacturing sectors that are on the increase nationally, Bailey said.

Reeder Kleymeyer emphasized the importance of diversification in industries to help cushion the local economy.

"We need to be sure that we're buoying so that when one industry is down, the other one is up, and Colorado Springs has done a really good job on that."

Bailey pointed to the growth of professional and technical industries within the community, as well as the presence of health care and social assistance industries, as evidence of that diversification over the past couple of decades.

"We've become more diverse, which is amazing," Bailey said. "And the trends are still going in that direction, so we're kind of getting our cake and eating it, too."

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