Colorado will continue on the road to recovery and add jobs in 2012 following a positive year in 2011, according to economist Richard Wobbekind of the University of Colorado Boulder's Leeds School of Business.
Wobbekind's announcement was part of the 47th annual Colorado Business Economic Outlook Forum presented Dec. 5 by CU-Boulder's Leeds School of Business.
Compiled by the Leeds School's Business Research Division, the comprehensive outlook for 2012 features forecasts and trends for 13 business sectors prepared by approximately 100 key business, government and industry professionals.
"In 2012 we're predicting slow but steady growth for Colorado, much like the U.S. economy," said Wobbekind, executive director of the Business Research Division. "We'll continue to add jobs in a wide array of sectors, but not at the dramatic rate that is necessary to significantly lower the unemployment rate."
Overall, the forecast calls for a gain of 23,000 jobs in 2012, compared with a gain of 27,500 jobs this year. Most sectors of the Colorado economy are predicted to grow in 2012, including the addition of 2,900 jobs in construction, marking the first positive job growth in that troubled sector in four years.
When comparing the Leeds' forecast to forecasts for other states, Colorado is expected to be in the top 10 states for job growth in 2012.
"The broader story here is Colorado entered the recession later, came out of the recession later and now appears to be accelerating past the rest of the country in terms of job growth and recovery," Wobbekind said.
Even with positive job growth predicted for the state, Wobbekind said uncertainty at numerous levels still clouds the economic picture in the state and nation.
"The theme of almost every national forecast is uncertainty," he said. "Every day there is a new event in Europe or a new event in Washington. So you continue to have all of these elements of uncertainty and they impact consumer confidence and household spending. That is something that is very hard to forecast or predict."
The strongest sector for projected job growth in Colorado in 2012 is the educational and health services sector. The sector is expected to add 7,500 jobs in 2012.
In addition, other leading growth sectors for 2012 include the professional and business services sector with 6,800 jobs added and leisure and hospitality with 3,800 added.
On the agriculture side, Colorado farmers and ranchers are coming off what is expected to be a record-setting year for net farm income. Colorado's agricultural producers benefited from unexpectedly strong market prices for livestock and crops in 2011, leading to an estimated record net farm income in the state of $1.7 billion. Historic drought in Texas, Oklahoma and Kansas spared much of Colorado in 2011, leading to increased market prices for Colorado agricultural products.
"Mother Nature played a major part in this, and this year it played in our favor," Wobbekind said, adding that Colorado agriculturalists also are expected to do well in 2012.
The manufacturing sector, after adding jobs in 2011 for the first time since 2003, will return to a long-term downward trend and is forecast to lose 1,900 jobs. Two other sectors expected to lose jobs are information, forecast to shed 500 jobs, and financial activities, losing 1,000 jobs.
In 2011, Colorado consumers spent more on goods and services, with retail sales increasing 6.5 percent for the year. In 2012, retail sales are forecast to remain relatively strong with a gain of 4 percent.
"We view the consumer as coming back to the table," Wobbekind said. "Consumers have deferred a lot, including what we would call more necessary expenditures such as automobiles and other essential products that have been wearing out and need to be replaced."
With 2011 coming to a close, Wobbekind said Colorado's economy is ending the year on a positive note.
"We went into the year a little bit slow and then built up momentum for pretty much the entire year, and the last couple of months we've passed the national growth rate for jobs, and we'll end the year above the national growth rate for jobs," he said. "2011 was a decent year in which we added jobs in a fairly wide variety of sectors."
Colorado's unemployment rate for 2012 is expected to decrease from 8.7 percent at the end of 2011 to 8.4 percent, compared with a projected national unemployment rate of around 9 percent.
Colorado's population is projected to grow 1.5 percent, or 75,900 people, in 2012.
To view the entire economic outlook for Colorado in 2012, including an overview of each of the state's major economic sectors, visit leeds.colorado.edu/BRD and click on the Colorado Business Economic Outlook 2012 icon.