The Colorado economy continues to grow in 2013 at a magnitude that exceeds previous expectations going into the year, according to economist Richard Wobbekind of the University of Colorado Boulder’s Leeds School of Business.
Midway through the year, Colorado’s job growth rate is up by about 2.3 percent -- a gain of about 52,400 jobs from May 2012 to May 2013. The job growth rate is expected to continue to rise to about 2.5 percent -- a figure that was revised from estimates last December when the projection was at about 1.8 percent.
“The performance of the Colorado economy has modestly exceeded our December 2012 forecast,” said Wobbekind, executive director of the Business Research Division and senior associate dean for academic programs at the Leeds School. “Obviously, we are pleased with the higher level of job growth and are hopeful it will continue throughout the remainder of 2013.”
Every industry except natural resources and mining, information and financial activities is registering year-over-year employment growth. Sectors seeing the largest growth include construction, professional and business services and leisure and hospitality, according to Wobbekind.
Wobbekind, who presents the Colorado Business Economic Outlook forecast each December, recently met with steering committee members who represent the state’s major economic sectors for a midyear update.
The value of single-family residential construction is up nearly 41 percent and multifamily construction has climbed more than 72 percent through May 2013, said Wobbekind. Nonresidential building activity is steady, surprisingly being driven by the construction of medical facilities and office buildings. Construction work in college and government building and rehabilitation of retail and industrial structures is slow. Infrastructure, including work on the new DIA rail line and major projects on I-225 and U.S. 36, is healthy, helping to lead Colorado’s recovery.
On the downside, a lack of precipitation and expected shortages of irrigation water remain a concern for Colorado’s farmers. While topsoil is generally adequate on approximately one-third of crop acres, subsoil moisture is adequate on only about 20 percent of acres. Pasture and range conditions indicate that nearly 60 percent of acres are in poor to very poor condition and crop yields across the state vary from average to total losses. Also, cattle and calves inventory is down by about 7 percent from last year.
“We had anticipated an extremely strong year for Colorado agriculture,” said Wobbekind. “Unfortunately, the lack of precipitation in a timely fashion will significantly impact this year’s production. Still, agriculture remains an extremely important part of the Colorado economy.”
Within the professional and business services sector, which rose by 4.4 percent in 2012, the professional, scientific and technical services subcategory experienced 3.4 percent growth and accounts for slightly more than half of the sector’s employment. Colorado remains a hub of activity in industries that require high-skilled labor, such as aerospace and clean energy, as well as consulting and legal services, according to Wobbekind.
A year-over-year increase in employment by 3.8 percent, or 10,500 jobs, was experienced in the leisure and hospitality sector year-to-date through May 2013. The hike comes after the best tourism year ever in Denver in 2012 -- propelling an eight-year trend -- with record numbers of visitors, visitor spending and lodger’s tax collection.
Colorado has the fifth-busiest airport in the nation and Denver is a destination for large-group meetings and conferences, accommodating up to 19,000 attendees. Colorado’s ski industry was buoyed last year by increased snowfall late in the season, allowing some resorts to extend their 2012-13 season and offsetting the unusually warm fall that led to slow early-season sales and visits.
For the complete Colorado 2013 midyear economic update visit http://leeds.colorado.edu/brd#coloradobusinessreview. To listen to audio clips of Wobbekind discussing the report visit http://www.colorado.edu/news/multimedia/colorado-see-continued-growth-2013-forecasts-cu-economist.