The Colorado economy continues to expand, outperforming the U.S. economy, but at a slower pace than seen in 2014 and 2015, according to a midyear economic update released today by the University of Colorado Boulder’s Business Research Division (BRD) at the Leeds School of Business.
Employment in the state was up by 2.4 percent year-over-year in May 2016. A total gain of 62,000 jobs in Colorado is expected for 2016, nearly reaffirming the estimate given in December at the BRD's 51st annual Business Economic Outlook Forum. However, the sources of that growth among the state’s sectors have slightly shifted from expectations with some areas performing better than others.
“Our original forecast for 2016 is similar to what we’re in fact seeing, but there are some sectors that are doing better than we anticipated and some that aren’t doing as well,” said economist Richard Wobbekind, executive director of the BRD, which prepares the midyear outlook. “There’s been more growth in government jobs and leisure and hospitality than we’d anticipated. And we certainly are seeing significant flows of venture capital particularly into software and applications-types of areas.”
Wobbekind also noted both commercial and residential construction is strong, as well as manufacturing and information, which includes publishing and telecommunications.
“We’re really seeing job growth across the board, except for the natural resources and mining sector,” he said.
Wobbekind recently met with Colorado Business Economic Outlook steering committee members, who represent the state’s major economic sectors, for the midyear update.
Agriculture: Low commodity prices and a decline in exports in 2016 continue to affect Colorado farmers and ranchers. Drought conditions have moderately abated.
Natural resources and mining: The number of seasonally adjusted jobs in this sector has been decreasing since January 2015. With 26,300 jobs in May 2016, the industry has experienced a 16.8 percent decline since May 2015.
Construction: Although employment in the industry has grown steadily since the beginning of 2012 and sits at 158,300 as of May 2016 – up from 147,800 jobs in May of last year – the number has not reached pre-recession levels.
Manufacturing: Employment in the sector surpassed committee estimates in 2015, but is underperforming against expectations for this year. Employment in the sector totaled 143,300 jobs in May of 2016, up from 140,700 around the same time last year.
Trade, transportation and utilities: Holding steady, the sector increased in employment by 1 percent through May after experiencing a 2.9 percent increase, or the addition of 12,400 jobs, in 2015. The sector currently employs 448,900 people and accounts for 17.3 percent of statewide employment
Information: Total employment in May 2016 was 71,800 jobs, or 36.6 percent below the peak reached in 2001, but up by 1.8 percent year-over-year.
Financial activities: Overall employment has seen a modest gain of 3,500 jobs year-over-year through May. The real estate, rental and leasing sector grew by 7.5 percent in the same period, indicating growth in the housing industry.
Professional and business services: Year-over-year growth in May 2016 was 2.2 percent, an 8,700-job increase, bringing the sector total to 405,700 jobs. Among the sector’s three subsectors, professional, scientific and technical services accounted for 51.2 percent of total employment in the industry in May 2016.
Education and health services: Total employment in the sector was at 321,000 jobs as of May 2016, a year-over-year growth of 3.1 percent. Accounting for nearly 88 percent of the sector’s employment, the areas of health care and social assistance grew by 7,300 jobs year-over-year in May, continuing a steady growth trend.
Leisure and hospitality: The sector grew by 5 percent in jobs year-over-year as of May 2016, or 15,500 jobs.
Government: Through May 2016, the sector is 7,000 jobs, or 1.7 percent, above the committee estimate, which was 418,200 jobs total.
International trade: Colorado exports were down by 11.1 percent year-over-year in April 2016. The state’s top-five import markets in order are Canada, Mexico, China, Japan and Malaysia. Malaysia replaces the Netherlands, which held the No. 5 spot at midyear in 2015.
For the complete Colorado 2016 midyear economic update visit the Business Research Division page.