Colorado’s economy will rev up slightly next year, led by hiring in construction, tourism and health care, according to the 2017 Colorado Business Economic Outlook from the University of Colorado Boulder.
The Outlook calls for Colorado to gain 63,400 jobs next year, which represents a 2.4 percent rate of growth. That’s ahead of the 2.2 percent rate estimated for 2016, but below the 3 percent-plus rates seen in recent years coming out of the recession.
Colorado should rank among the top 10 states for job growth for the sixth year in a row, making it a draw to workers in search of opportunities. Colorado is expected to have the second fastest rate of population growth in the country this year, adding another 95,000 people to bring the total to 5.5 million.
“The growth will be across every sector except natural resources and mining and again will support the strongest period of employment growth that we’ve had since the 1990s,” said Richard Wobbekind, an economist with Leeds School of Business on CU’s Boulder campus.
Wobbekind oversaw the forecast, which is in its 52nd year and this time involved more than 100 business, government, and academic experts. He and Denver Metro Chamber of Commerce CEO Kelly Brough presented the findings during a public forum Monday.
Depressed oil, natural gas and coal prices that contributed to big layoffs in the mining sector the past two years knocked Colorado off its 3 percent-plus pace of job growth.
But many of those workers were able to find other jobs and the great contraction in mining employment could finally reverse in the second half of next year, Wobbekind said.
With the state unemployment rate hovering around a low 3.5 percent, the labor market is its tightest since the dot-com boom, and that is slowing hiring.
“Labor-force issues are a big deal,” he said. “The market is very constrained.”
The forecast calls for 9,000 jobs in construction, a 5.7 percent increase that will be the strongest of any sector. As apartment construction slows slightly, single-family homebuilding is expected to pick up more.
That construction hiring forecast was lifted after voters across the state last month passed a larger than expected number of bond issues to fund multiple projects. However, Wobbekind said he isn’t sure where all those skilled trades workers will come from given the difficulty contractors already have filling open jobs.
Much of the work on the forecast was done before the election. President-elect Donald Trump has pledged to spend large sums on infrastructure, but he needs to convince Congress that larger federal deficits are in the country’s interest.
Any benefits from that increased spending would likely show up in 2018 and beyond. Ditto for lower tax rates and regulatory reforms. Conversely, manufacturers and food producers who had hoped exports would be boosted by pending trade agreements that are unlikely to see the light of day now will have to make other plans.
“The only thing I am betting on are tax reforms,” Wobbekind said.
Leisure and hospitality employment is expected to grow by 3.7 percent or 12,100 jobs next year, while education and health services, always a steady performer, will increase employment by 10,600 positions or 3.3 percent.
Colorado’s farmers and ranchers are expected to face another tough year in 2017 due to low commodity prices, drought and other fluctuations in the weather.
Farm income, which ran at $850 million in 2014, dropped to $444 million this year and is expected to only reach $392 million in 2017, adding to the pressures on rural areas of the state.
Denver Post staff writer Emilie Rusch contributed to this report.
