Colorado's economy continues to grow despite a number of headwinds, including persistent inflation, rising interest rates, worker shortages and slowing consumer spending, according to the annual Business and Economic Outlook released Monday by the University of Leeds Business Research Department (BRD). should maintain its resilience into 2024. work.
The forecast, created by the BRD and the State of Colorado with input from 125 business leaders from a variety of industries, includes a projection of 1.4% job growth in 2024, with 11% of the state's major industries Seven more companies are expected to add jobs.
Richard Wobekind, Associate Dean for Business and Government Relations and Dean of the BRD at the University of Leeds, said: “Forecasts suggest that employment growth will slow in 2024, but in this fiscally constrained environment, “I'm satisfied with how well the economy is working,” he said.
In the face of rising interest rates, Colorado's growth slowed noticeably in 2023, with GDP increasing 2.2% year over year in 2022 and 1.5% in the first quarter of 2023. This compares to an average growth rate of 1.6% for states across the country during the same period. The country's GDP in 2023 increased by an estimated 2.4%. BRD expects domestic GDP to grow by 1.4% in 2024 as consumption slows but remains resilient.
So far this year, Colorado's job growth rate is 1.5%, ranking 42nd among states. However, because the state's employment is statistically underrepresented, BRD expects Colorado to move up in the rankings once the correction is applied in the first quarter of 2024.
Colorado's unemployment rate went from a near-record low of 2.6% in August 2022 to 3.3% in October 2023. This placed it in the middle of all states, tied for 26th place. Colorado had the fifth highest labor force participation rate in the country and outpaced 31 other states in labor force growth.
Employment in the state will increase by an estimated 2.2% in 2023, adding 64,500 jobs, reaching a record high of 2.9 million in October 2023. The BRD forecasts an increase of 41,900 jobs in 2024, an increase of 1.4% in the number of employed workers.
Industries expected to increase employment
The following industries are expected to increase employment in 2024:
Professional and Business Services (14,500 jobs)
Employers in this field – involved in professional, scientific and technical services. Management of companies and companies. Administrative, support, waste management, and remediation services are located primarily along the Front Range and typically employ and retain highly skilled and educated workers.
Employment in this sector grew rapidly in 2022, but is expected to slow in 2023 and 2024, with growth expected to be 3.4% and 2.9%, respectively.
Government (10,900 jobs)
The sector accounts for nearly one-sixth of the state's employment and includes federal, state, and local employees. Although employment has rebounded since the early days of the pandemic, government agencies at all levels face the same challenges as other sectors, including worker shortages and supply chain issues.
The BRD expects the state's employment to steadily increase, especially in 2024, due to new state programs from the Ministry of Labor and Employment and the Ministry of Public Health and Environment.
Education and health services (9,400 jobs)
Increased employment in nursing homes and residential care facilities is driving growth in this sector, with private education services expected to contribute to employment growth in 2024.
Trade, transportation and utilities (5,300 jobs)
Consumers continue to spend more online, which increases the need for warehousing and delivery. Growth in retail sales and retail employment has slowed from its pandemic highs, but employment in the sector is expected to grow at a modest 1% in 2024.
Leisure and Hospitality (5,000 jobs)
Colorado continues to see significant travel spending. The ski industry in particular enjoyed an exceptionally strong 2022-23 season, with him setting a record for skier attendance for the second year in a row. BRD expects the leisure and hospitality industry to continue growing at a moderate pace of 1.4% in 2024, battling inflation and supply chain issues.
Other services (1,300 items)
Businesses in this category are very diverse and include car washes, hair salons, religious organizations, funeral homes, grant-making foundations, labor unions, and more. One thing they all have in common is that their performance is closely tied to the economy, state demographics, and consumer spending.
BRD expects employment in these services to increase by 1% in 2024.
Natural Resources and Mining (1,200 jobs)
Employment in this industry is expected to increase by an estimated 4.3% in 2023 and continue to grow in 2024. This industry accounts for less than 1% of Colorado's workforce, but produces the highest per-worker income levels in the state.
Industries expected to lose jobs
Four industry groups are projected to lose jobs in 2024 due to rising interest rates and other economic headwinds:
Construction industry (employments -2,300)
Multifamily construction is expected to decline in 2024 as rising interest rates dampen demand in the single-family home market and demand for apartments will be partially met by new construction units coming to completion. Meanwhile, demand for non-residential construction and infrastructure projects is expected to remain strong.
Manufacturing (employments -1,400)
The sector has recorded its fastest pace of growth since 2018, but hiring has been hampered by high interest rates, changing consumer behavior, and issues such as drought and water availability. In 2023, employment will decline by an estimated 500 people.
However, BRD pointed out that there are some bright spots in this area. Federal investments and incentives are expected to increase jobs in industries supporting aerospace and defense, and the state's renewable energy and computer and electronics manufacturers should get a boost thanks to lower inflation. Act and CHIPS Act.
Information (-1,000 items)
Employment in this sector is expected to decline in 2023 and 2024 due to the long-term decline of traditional publishing and communications industries.
Financial activities (-800 jobs)
The two industries that make up this sector, finance and insurance, and real estate, rental and leasing, have been hit hard by rising interest rates, with job losses predicted to occur in 2024.
Other highlights of the economic forecast
Other highlights of the BRD economic forecast include:
Nationally and in Colorado, the agricultural sector is suffering from a combination of high production costs and low crop prices. Colorado's net farm income is expected to decline by 21% in 2023, which is slightly lower than the projected decline in farm income for the entire United States. Beef cattle account for most of the state's agricultural income, and the sector remains strong.
Increased rainfall in 2023 also increased production of corn, wheat and other row crops, according to the BRD report, but farmers, policymakers and industry leaders say the West's water problems are It recognizes that this is a long-term problem with no easy solutions.
craft beer brewing
Colorado's craft beer industry continues to thrive and has proven its ability to innovate and adapt over the past several years. According to the Brewers Association, Colorado remained fifth in the nation in number of craft breweries (440) in 2022 and ranked 10th in craft beer production with more than 834,000 barrels.
Colorado craft breweries are increasingly engaging in sustainable practices, such as harnessing solar power and reducing water usage. According to the BRD, these breweries are not only regional staples, but also tourist attractions and are likely to continue to drive economic growth and job creation.
Similar to national trends, the pandemic had a significant impact on Colorado's minority unemployment rate, which continues to recover.
In July 2023, the total number of continuing unemployment claims among Colorado's Asian population has been slow to recover since the pandemic, increasing 103.3% from January 2020 and 75.2% from July 2022. The increase in unemployment claims among the white population in July 2023 was slightly slower from 27.5%. % year over year, and since January 2020 he was 0.7%.
In July 2023, the black unemployed population decreased by 8% from the previous year. The unemployed Native American population has fully recovered since the pandemic, down 11.1% year over year and 30.6% from January 2020 levels.
minority owned business
These companies face ongoing challenges, including limited access to financing and a lack of technical resources. The Colorado Minority Business Office works to provide connections to educational opportunities and resources. The BRD said industries that look promising for opportunities for minority-owned businesses include construction, hospitality and services.
The report notes that although services exports are not factored into the state's official trade statistics, travel likely accounts for a large share in Colorado. According to recent passenger data, the number of international passengers landing at Denver International Airport in September 2023 increased by 9.2% year over year and 15.3% compared to September 2019 levels.
Regarding merchandise trade, annual exports are expected to reach $10.5 billion in 2023, while imports are expected to reach $20 billion. According to the BRD, 2022 was the first year in which exports exceeded $10 billion and imports exceeded $20 billion. Total exports up to September 2023 increased by 0.8% nominally, while total imports decreased by 12.6% nominally.
Five product groups account for approximately two-thirds of Colorado's total exports: meat, precision equipment, industrial machinery, electrical equipment, and aircraft and spacecraft.
As of July 2022, Colorado's resident population is 5.8 million people, ranking 21st among all states. Colorado's population increased by 27,710 people (0.5%) from July 2021 to July 2022, ranking 12th among states in terms of total increase/decrease rate and 19th in terms of rate of change.
Colorado's growth rate in 2022 was similar to 2021, but significantly down from the previous decade's average of 74,000 people per year. The biggest factor in Colorado's population change is the number of births. On the other hand, the number of deaths is increasing due to the aging population and the new coronavirus infection.
Net migration accounted for 14,924 of the state's population growth in 2022, a slight increase over 2021. Twenty-six counties experienced overmigration, led by Jefferson, Arapahoe, Denver, Eagle, and Summit counties.
Although Colorado's population growth is expected to slow in the coming decades, it is projected to continue to outpace the nation and grow at about twice the national rate. Colorado is projected to increase from 1.7% of the US population in 2020 to 2% by 2050.