The Colorado economy continues to expand, outperforming the U.S. economy and reaffirming previous expectations, according to the midyear economic update released today by the University of Colorado Boulder’s Leeds School of Business.
“Right now we’re very, very close to our forecast released in December,” said economist Richard Wobbekind, executive director of the Business Research Division, which conducts the midyear outlook. “At this point we’re pretty comfortable, staying at the overall projected job level.”
Colorado’s employment is up by 2.5 percent year-over-year from May 2014 to May 2015. A total gain of 61,300 jobs in Colorado is expected for 2015, reaffirming December estimates.
The midyear update projects growth in all of the state’s sectors except for information, which includes publishing and telecommunications.
“GDP is strong, personal income is strong and a lot of the sectors are doing very well,” said Wobbekind, who presents the Colorado Business Economic Outlook each December -- an outlook that’s updated each summer. He recently met with steering committee members who represent the state’s major economic sectors for the 2015 midyear update.
--Agriculture: Spring rains brought beneficial moisture, allowing herd rebuilding after drought-induced sell-offs, providing abundant grazing land for livestock and reducing the need to buy expensive supplementary feed.
A downside to the rain is increased risk of disease in wheat, though harvests are expected to remain about the same as last year -- a growth year. The spring rains also delayed the planting of corn.
Milk prices are well under last year’s prices, egg wholesale prices are nearly doubled since last year because of avian flu in other states, fruit crops on the Western Slope generally are in better condition than in previous years and potato crops are holding steady compared with last year.
--Natural resources and mining: While the sector -- a significant driver of Colorado’s expansion and economic recovery since the recession -- continues to experience strong growth, employment totals are at 34,500 jobs as of May, which is lower than the December 2014 projection of 36,000 jobs.
Oil prices -- a key factor in the industry’s performance -- are expected to remain low; however, the potential closure of Colowyo Mine in Meeker, Colorado, because of a lawsuit could deal a heavy blow to the sector, a loss of about 171 jobs.
--Construction: Although employment in the industry has grown steadily since the beginning of 2012 and sits at 152,800 jobs as of May, the number has not reached pre-recession levels. Demand currently is high for homes for sale and inventory is at its lowest since June 2013.
--Manufacturing: Employment in the sector surpassed committee estimates by 600 jobs in 2014 and is continuing to outperform expectations through May 2015. The sector currently totals 139,800 jobs and has experienced gains for four and a half consecutive years following a decade of employment losses.
--Trade, transportation and utilities: Holding steady, the sector increased in employment by 0.1 percent through May after experiencing a 2.8-percent increase, or 10,800 jobs, in 2014.
Though the transportation and warehousing subsector shows a 2.2 percent decrease through May -- compared with a 4.2 percent increase, or the addition of 2,800 jobs, in 2014 -- there’s reason for optimism with the near-completion of a hotel, plaza and transit center at Denver International Airport, as well as the scheduled debut in 2016 of the FasTracks rail line that will connect Denver and DIA, according to the midyear report.
--Information: Employment in May was down by 2.7 percent compared with May 2014. While a few local companies like Zayo and Rally Software have added jobs, larger companies, such as CenturyLink, have shed jobs, outweighing the smaller gains.
--Financial activities: Overall employment has seen a modest gain of 4,900 jobs year-over-year through May and the subcategory of real estate, rental and leasing grew by 5.5 percent in the same period.
--Professional and business services: The sector expanded by 1 percent and added 3,700 jobs year-over-year for a total of 387,500. Colorado remains a hub of activity in industries that require highly skilled labor and are high-paying, such as aerospace and clean energy, as well as consulting and legal services, according to Wobbekind.
--Education and health services: Health care and social assistance, which make up a majority of the education and health services sector, added 14,500 jobs, or grew by 5.6 percent, year-over-year in May.
The long-term economic impacts of the Affordable Care Act remain to be seen, but the health care exchange and pent-up demand for health care is credited for a 10 percent jump in national health care spending that added $43.3 billion in national consumer spending, according to the midyear report.
Although Colorado’s uninsured rate has dropped from 17 percent to 11 percent, barriers to enrollment for individuals persist, according to the midyear update.
--Leisure and hospitality: The leisure and hospitality sector is showing strong growth with a year-over-year increase in employment of 4.5 percent in May.
--Government: Employment in the sector is trending slightly below December estimates as of May, though increases at the state and local levels ultimately should outweigh losses in jobs at the federal level, according to the midyear report.
--International trade: In international trade, Colorado exports increased by 5.6 percent year-over-year in March. The state’s top-five import markets in order are Canada, Mexico, China, Japan and the Netherlands.
For the complete Colorado 2015 midyear economic update visit http://leeds.colorado.edu/brd#coloradobusinessreview.
Richard Wobbekind, 303-492-1147
Brian Lewandowski, Leeds School of Business, 303-492-3307
Elizabeth Lock, CU-Boulder media relations, 303-492-3117