The Colorado economy will grow at a modest pace throughout the second half of 2011 with slow but positive job growth, according to economist Richard Wobbekind of the University of Colorado Boulder's Leeds School of Business.
"Colorado businesses will continue to experience revenue and profit growth, but we are not going to see the level of hiring needed to seriously bring down the unemployment rate," Wobbekind said. "And that remains the long-term challenge for our state and the nation as a whole."
Wobbekind, who gives the Leeds School's annual Business Economic Outlook forecast each December, recently met with the forecast steering committee members who represent the state's major economic sectors and his own research team for a midyear update on Colorado's economy. The December forecast called for a gain of 10,100 jobs in 2011, compared with the more than 140,000 jobs the state lost in 2009-10. Halfway through the year the forecast is pretty close, Wobbekind said.
"Most of the state's sectors are doing about what we anticipated. However the construction and government sectors have been extremely disappointing," he said. "It is very tough to have a recovery when you have a construction sector that is losing jobs and now the government sector is exacerbating that situation."
On the bright side, agriculture is outpacing the forecasted expectations for growth and recovery in 2011, and Wobbekind expects the rest of the year to be positive as well.
"We have had stronger than expected agricultural exports," he said. "Global concerns about food prices has led some nations to stockpile food to create a buffer against high prices. There has been strong demand for corn, wheat and cattle. Overall, it's been a good year for agriculture."
While it is possible that the nation, including Colorado, could slip into a double-dip recession in 2011, Wobbekind is still betting against it.
"Right now, a very small number of people are calling for a double-dip recession," he said. "If it were to happen it would slow down job growth even more nationally and in Colorado, adding more difficulty to an already battered job market."
And the ongoing debate about raising the debt ceiling is not helping the economy, Wobbekind said.
"Combining that with the issues of sovereign debt in Europe adds one more level of uncertainty to our national economy and the global economy," he said. "Consumers are uncertain, businesses are uncertain about hiring and now you're adding uncertainty about government finances in the U.S. The last thing we need is more uncertainty."