Surviving the 'long, hard slog': economist expects modest growth in '08; execs commiserate about lack of good hires.

• Author: Cote, Mike

From a meeting room atop the Fairmont Hotel, the 16 people gathered to discuss the 2008 economy could see the San Francisco skyline draped in gray as a steady rain pelted the asphalt. A good setting for the ColoradoBiz Economic Roundtable, featuring a talk that would be dubbed "The Long, Hard Slog."

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The Colorado group had spent the previous day touring wine country in Napa Valley on a sun-drenched October day, part of their reward for their businesses being named a Top Company winner by ColoradoBiz. The forecast they were about to hear over an early breakfast was as much of a wakeup call as the ones some of them had probably needed to get ready for the return flight to Denver.

Bill Greiner, chief investment officer for UMB, the financial corporation that co-sponsored the trip, said he's not predicting the U.S. economy will fall into a recession, though he said he gives it a 40 percent chance of happening over the next 12 months.

For comparison, outgoing regional U.S. Bank economist Tucker Hart Adams said in September that we may already be in the early stages of a recession, while Wells Fargo economist Michael Swanson, talking to Jefferson County business leaders last month, said he predicts job growth, access to capital and increased productivity will keep us out of one.

Greiner said to expect the next 18 months to be sluggish at best, with gross domestic product growth, currently averaging about 1.9 percent per quarter, stalled far below its post-World War II average of 3.3 percent. Leading economic indicators show an economy that is growing very slowly.

"It's a lethargic economy but one where the numbers are still positive," Greiner said.

Blame the slog in large part on the housing market, which Greiner referred to as "the wizard behind the curtain," alluding to the famous scene from "The Wizard of Oz." The U.S. housing market is not done with its contraction, "but this does not necessarily mean a major problem." Time and the market should take care of it over time, he said.

As always, the economy will be depending on consumers to keep those growth numbers in the black.

"People are nervous but not so much that they aren't spending money," he said. The U.S. consumer is "the big dog in the park. The consumer is going to drag us out of the quagmire."

Except when it comes to housing, which has become such a buyers' market in some locales that homeowners have taken their properties off the selling block because they...