2023 Forecast: Despite recent growth, Colby president concerned about inflation, labor shortages

Photo / Jim Neuger David Greene, president of Colby College, at the opening of the Paul J. Schupf Art Center in Waterville.

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By Peter Van Allen

Colby College has been instrumental behind much of the recent growth in downtown Waterville.

The town-gown relationship has grown with the downtown additions of the Lockwood Hotel, the Paul J. Schupf Art Center and the Alfond Main Street Commons, as well as associated businesses. Close to $200 million has been invested in the downtown, with almost half of it driven by Colby.

But Colby’s president, David Greene, is nonetheless concerned by some of the external factors that may affect the private college of 2,200 students.

“I am concerned about a recession, but my best guess (and hope) is that any economic downturn will be relatively shallow. The business fundamentals in the U.S. continue to be strong, unemployment is low, and investors seem to be waiting for clarity and the right opportunities. All that said, the Fed has a lot of embedded practices to unwind at a time when inflation has been stubborn and the global environment is shaky,” Greene told Mainebiz.

“We certainly feel the impact of rising prices and a changing labor force at Colby. Our two largest expenditures are personnel costs and financial aid, both of which can fluctuate significantly in an inflationary environment or in a sustained economic downturn. On top of that, we purchase many items that consistently rise in price faster than the CPI, such as specialized instrumentation for scientific research and books and journals for our library collection.”

He also cited the effect higher construction costs have had on the college’s numerous expansion projects.

“One area where we have seen a real challenge from inflation and supply chain disruptions is in our capital projects. We have been able to work through these issues successfully while opening four new residence halls this year and two art centers in two years (with a third opening in August). I expect we will start to see more certainty in commodity and labor pricing for other projects we currently have in planning, but the prices are still going to be high,” Greene said.

Greene also voiced his concern about rising tuition costs.

“The cost of college is rightly a concern for many, and our commitment is to ensure that Colby will always be affordable for the talented students we admit no matter their personal financial circumstances. Our financial aid programs ensure that lower- and middle-income families can send their children to Colby without taking out loans and at a cost that is among the lowest in the nation for both private and public colleges. We will not compromise on that commitment even in the face of other financial pressures,” Greene said.

Through all of that, the Colby president said he hopes to maintain the forward motion the school has had in recent years.

“Our biggest challenge in the coming year will be to maintain the extraordinary momentum that has propelled Colby and Waterville forward in recent years,” Greene said. “I am confident we will be able to continue our push forward but the risks are real because of the way recessions and economic uncertainty can lead to inertia and a wait-and-see approach. My view is that it is in these moments, when others are laying low or retrenching, that smart organizations with a willingness to take calculated risks can make the most progress. Colby has done that time and again to great effect.”