Colorado’s econ­omy ex­pected to thrive de­spite worker short­ages

The Denver Post - - FRONT PAGE - By Aldo Svaldi Den­ver Post staff writer Em­i­lie Rusch contributed to this re­port.

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. Pres­i­den­t­elect 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.

Above is a Sept. 29 look at the new Union Tower West un­der con­struc­tion, a mix of ho­tel and of­fice space at the in­ter­sec­tion of 18th Street and We­watta Street in Den­ver. Andy Cross, The Den­ver Post

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