Colorado will gain jobs in 2021, but it will not be able to make up for the economic losses brought by the global COVID-19 pandemic, according to the latest Colorado Business Economic Outlook (CBEO).
The yearly forecast is compiled by the University of Colorado Boulder’s Leeds Business Research Division. The CBEO is the most comprehensive annual outlook on the Colorado economy, breaking down 13 business sectors and seven regions around the state.
The report will be presented virtually to state business leaders at the virtual 56th annual Colorado Business Economic Outlook Forum Monday, Dec. 7. Industry breakout sessions will follow during midday sessions the rest of the week.
The CBEO projects Colorado will regain 40,500 jobs (1.5%) in 2021, which is less than one-third of the state’s estimated 2020 job losses.
“It will continue to be a bumpy road as long as the economy goes through rolling lockdowns,” said Leeds Senior Economist Richard Wobbekind. “The outlook for 2021 hinges on a vaccine’s ability to reopen the economy, particularly in the service sectors. Our expectation is a stronger second half of the year.”
Colorado will likely fall out of the top 10 states for employment growth in 2020 and 2021, Wobbekind predicted.
The two industries hardest hit by the COVID-19 economic downturn—leisure and hospitality and trade, transportation and utilities—are projected to grow most in 2021. Leisure and hospitality are expected to add 19,200 jobs while trade, transportation and utilities are predicted to gain 14,700. All told, nine of the state’s 11 industries are expected to gain jobs.
The government sector is expected to lose the most jobs to the tune of 6,900. The information sector is projected to lose 1,100 jobs.
Work-from-home changes spurred by COVID-19 will continue to impact commercial real estate, transportation and retail sales, according to the CBEO.
Colorado’s population growth will be the slowest since 2003, adding an estimated 53,300 people, according to the State Demography Office. Just 35,100 new Colorado transplants will come from net in-migration.
Key industry 2021 forecast
The current conditions and forecasts of the following industries are included in the Colorado Business Economic Outlook.
Construction employment is projected to remain flat, with zero new jobs.
Private education and health services sector will earn back 4,500 new jobs, a change of 1.3%.
The CBEO anticipates financial activities earning 2,500 jobs in 2021, a change of 1.5%.
Government will see the largest job losses next year, according to the CBEO, shedding 6,900 jobs for a loss of 1.6%.
The information sector is also projected to lose 1,100 jobs, which is roughly a 1.5% decline from 2020.
Leisure and hospitality will see the largest job gains, with 19,200 jobs. That represents a 7% change from 2020.
Manufacturing is expected to see a 1.5% gain for 2,300 jobs.
Another 400 jobs are anticipated in the natural resources and mining sector, which is a 2% gain.
Professional and business services, a sector that includes professional, scientific and technical services, management of companies, waste management and remediation services, should expect 4,400 jobs (1%).
The CBEO projects trade, transportationa and utilities to see the second largest job gains with 14,700 jobs or 3.1%.
Other services, such as religious, grantmaking or civic organizations, will see about 500 jobs (0.5% gain).
Around the state
Boulder County: Boulder County’s robust, collaborative economy is expected to aid COVID-19 recovery efforts after losing roughly 15,700 jobs as of September 2020.
Kit Carson County: Prices for commodities, such as corn, continue to be low, hampering the main economic driver for this part of the state, though unemployment remains lower than the state average.
Mesa County: Mesa County is outperforming the state and nation with its COVID-19 recovery. Unemployment fell from 12.6% in April to 5.7% in September. The state’s extended Rural Jump-Start program continues to be a draw for economic development.
Northern Colorado: A diverse industry mix may have helped ward off the worst of the pandemic’s economic pains. Area business leaders believe an educational focus on industry-relevant training may have prepared the region’s workforce for the sudden changes of 2020.
Pueblo County: A 4.1% unemployment rate in 2019 rose to 11.7% by April, thanks to COVID-19. It fell to 7.5% by September, a rate still higher than the rest of the state. The recently completed Historic Arkansas River Project is driving business downtown. High-tech economic development projects have also continued on despite the pandemic.
Southern Colorado: El Paso County unemployment more than doubled from September 2019 (2.8%) to September 2020 (5.9%). Even so, that marks a sharp recovery from the peak of the pandemic in April, when the county measured 12.5% unemployment. Aerospace and defense contractor business may cushion the area’s economy.
Southwest Colorado: A drought not rivaled since the 1500s is piggy-backing on top of COVID-19 in this area. Talent recruitment, talent development and increased broadband access are expected to play key roles in recovery.