The Colorado economy continues to grow at a modest pace in 2012, positioning the state among the healthier in growth nationally, 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 to about 1.6 percent -- a gain of about 35,000 jobs in 2012 if the pace holds steady, placing the state sixth nationally in job growth rate. The estimate is up from last December when the forecast totaled about 23,000 jobs for the year.
“You might say it’s balanced growth, which is symptomatic of a broad-based recovery in the economy,” said Wobbekind. “Both primary and feeder industries have picked up, and we’ve seen job growth in most industries, including tourism, natural resources, transportation and utilities, with significant strength in the tech sector.”
Every industry except government and information is registering year-over-year employment growth. Sectors seeing the largest growth include professional and business services, construction, education, health 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 construction could nearly double compared with 2011, including commercial and residential building, and Colorado also could see a large jump in multifamily developments, said Wobbekind. Employment in the sector also is up for the year.
On the downside, tourism has been dealt blows by unfavorable weather conditions and now wildfires, said Wobbekind.
“One industry’s downfall is another industry’s benefit,” said Wobbekind. “The tourism industry suffered from having a warm winter, if you will, and low snowfall, but the construction industry benefits from a warmer January, February and March because they can start construction projects earlier, pull permits earlier and get crews out there earlier.”
Agriculture is doing well overall after a record-breaking 2011, although low crop yields due to drought are a concern going forward.
Nationally, natural gas prices are lower, which gives rise to pros and cons for Colorado producers and consumers.
“Natural gas prices are lower and that actually is causing the production value of oil to be greater than the value of natural gas right now,” said Brian Lewandowski, research associate at the Leeds School’s Business Research Division, headed by Wobbekind. “While it’s kind of a bust for producers, it’s really good for the consumers. A lot of our energy is now produced from natural gas.”
Education demand is up due to increasing enrollment in Colorado universities and community colleges. Wobbekind attributes the increase to an uptick in the unemployed returning to school to update skills, as well as a trend of Coloradans staying in the state for lower tuition.
The education swell gives rise to another contrast. State government employment is positive due to the enrollment increase, but the state is unable to substantially fund higher education because of competing demands -- a situation that is unlikely to change and requires alternative options, said Wobbekind.
“It takes an overhaul of the tax system, it takes a change in revenues somehow or other, or it just is a trend that we live with and we figure out a way to fund ourselves more entrepreneurially,” said Wobbekind. “That’s, of course, the route we’ve taken as a university.”
For more information about the Leeds School’s Business Research Division visit http://leeds.colorado.edu/brd. To listen to audio clips of Wobbekind’s midyear update visit https://www.colorado.edu/news/multimedia/colorado-see-continued-moderate-growth-2012-forecasts-cu-economist.