Looking Ahead - Colorado Employment Growth

In 2008, Colorado ranked 10^th in the country for job growth, increasing 0.8%. According to Economy.com, Colorado is expected to fall in ranking to 31^st, losing 3.8% of employment in 2009, before rebounding to 9^th, with -0.4% employment growth in 2010. It becomes a stark reality check when a state can rank among the top ten performers while recording a net loss of jobs.

Early in the decade, employment peaked in December 2000 and didn't return to that level until December 2005 - a full five years later. Since then, the state added more than 110,000 new jobs before peaking in June 2008. Seventeen months later, the precipitated decline has moderated, but may not be over. Assuming that employment bottoms in Q1 2010 and begins to build, the year could be a net zero for growth. If the state returns to pre-recession growth rates, then it could be likely that Colorado returns to June 2008 employment sometime in 2013. If some new, slower growth becomes reality, it could be longer.

Colorado will have roughly 117,900 more jobs closing out this decade than when it began, all of which were essentially created in the first 12 months of 2000. Population has increased nearly 870,000 over the same period. With unemployment at 6.7% (not seasonally adjusted), there are many more people living off the same number of jobs created a decade ago.

While Q1 2009 total wages were down more than a billion in Colorado year over year, wage growth over the decade has been substantial, growing at a compound annual rate of 3.7% from 2001 through 2008, and outpacing population and employment growth.  During this period, average wages increased 3% per year, employment increased 0.7%, and population at 1.7% (half of which came from in-migration), annually from 2001 to 2008. Regardless of the strong wage performance of the decade, the quick drop in both total and average wages have been a shock to state and local government funding, which relies heavily on income taxes and consumer spending (sales taxes).

Residents and business have undoubtedly been strained in this remarkable recession. Households have experienced wealth shocks (homes and investments), debt shocks (home equity loans, mortgages, credit cards), and job losses. Businesses have seen markets dry up and consumers shrink. The interconnectedness of economies and industries has become ever more apparent (e.g., architects and engineers are pipelines for commercial construction, which is impacted by consumer spending and industrial growth; and as industry grows, population grows thus more rooftops, schools, and infrastructure).

Colorado's industry diversity, innovation, quality of life, and skilled workforce are sure to help state return to growth. Given the state's mix of goods-producing and services-producing industries, and export and domestic markets, the state is clearly a player on the greater national and global economies.

On December 7^th, the Business Research Division at the Leeds School of Business will release our projections for 2009 and 2010 employment in the state at the Colorado Business Economic Outlook Forum. This consensus forecast will be based on the thoughts and expertise of industry leaders on the ground in Colorado, with their comprehensive stories surrounding the numbers. Come listen to the economic intricacies that will impact your community in 2010.