Colorado will continue to add jobs in 2020, but at the slowest pace in almost a decade.
“No reason to panic,” said Richard Wobbekind, an economist at the University of Colorado Boulder and co-author of an annual economic forecast the university released Monday. Colorado, he said, will still be the envy of much of the nation in terms of job and GDP growth.
The CU forecast predicts 40,100 new Colorado jobs in 2020, which should keep the state in the top 10 nationally. But that’s well off the pace of just a couple of years ago — in 2018 for instance, Colorado added 64,900 jobs.
The state labor market would grow faster if only there were the workers available to fill jobs. The unemployment rate in Colorado tied the record low in November at 2.6 percent. Wobbekind said the state’s employers are importing labor from other states, and pulling workers off the sidelines with high wages, but that can only go so far.
Despite the constrained labor market, Gross Domestic Product growth in Colorado will continue to outpace the nation through 2020.
“And the reason for that is we’re getting more productivity from the labor force,” Wobbekind said. Productivity is rising in part because employers have squeezed more from the workers they have.
“Colorado is still outperforming,” said CU Boulder’s Brian Lewandowski, a co-author of the economic forecast. Looking across almost all industries in Colorado, “it’s pretty much across the board a net positive for the state.”
Lewandowski said only the information sector, which includes newspapers and broadcasters, is expected to see a decline in jobs in the next year. Another sector that could have a tough year is oil and gas. Lewandowski said the sector is full of risk.
“There’s uncertainty about oil commodity prices, there’s uncertainty in Colorado about regulation of the oil and gas sector,” particularly around new regulations like Senate Bill 19-181.
But the good news far outweighs the bad. Agriculture, after years of difficult times, had a good 2019, due to higher than expected beef and corn prices.
“And we think that’s going to continue on into 2020 as well,” said Wobbekind.
Economists also expect the construction industry to expand. Colorado’s population is forecast to rise by 49,000 in 2020, supporting the need for more residential construction. Meanwhile, large public works projects on I-70 and at Denver International Airport will continue for years to come.
Probably the best news for Colorado’s economy is that professional and business services, the state’s largest industry sector (think executives, lawyers, and engineers), is forecast to add 11,700 jobs. This is the highest-educated and best-paid sector. Growth in these jobs has a compound effect, the high wages spent on retail, real estate and restaurants add new jobs in all those sectors.
Looking nationally and globally, the economic storm clouds get darker. A trade war with China and other nations continues. The presidential election is less than a year away. And political uncertainty, as impeachment proceedings move through Congress, has businesses skittish. Surveys of Colorado businesses reveal increasing skepticism in the national and local economies.
And many are looking for any warning signs of a slowdown they can find in what is already the longest economic expansion in U.S. history. These expansions don’t last forever.
“All of the uncertainty that we have in the economy right now is contributing to this view that this is not only long in the cycle, but sort of the end of the cycle,” Wobbekind said.