Job growth expected to slow

Worker shortage will hold back economic growth in 2018, CU economists predict

Job growth in Colorado is expected to slow next year as an overtaxed infrastructure system and worker shortages weigh on the economy, according to the Colorado Business Economic Outlook 2018, which was released Monday.

“The economy is still strong here. We just don’t have enough labor,” said Richard Wobbekind, executive director of the business research division at CU Boulder’s Leeds School of Business, which prepares the closely followed forecast.

The outlook doesn’t call for a downturn. If one is in the cards, it probably won’t start to show up nationally until 2019, Wobbekind said. Rather, it projects hiring in Colorado will slow next year, not because of a lack of job openings but rather a lack of workers to fill those positions.

Colorado is expected to add 56,300 nonfarm payroll jobs this year, a growth rate of 2.2 percent. That is close to last year’s 57,300 jobs added and 2.3 percent growth rate. Next year, the state is expected to add 47,100, a growth rate of only 1.8 percent.

The three industries that will contribute the most to job gains next year are professional and business services, with about 10,000 jobs added; trade transportation and utilities with 8,700 jobs added; and education and health services, with 8,400 jobs added.

On a percentage basis, some of the stronger gains will come in natural resources, which is enjoying a resurgence because of higher oil and natural gas prices. Petroleum producers and service providers are adding more workers after a long stretch of consolidation. But they are doing so in a tight market, and sometimes in head-tohead competition with the construction industry, which is struggling to meet a big backlog in infrastructure projects and a deficit in new single-family homes.

Colorado’s unemployment rate, which hit an all-time low of 2.3 percent this spring, should average 2.6 percent next year, up from an average of 2.5 percent in 2017.

That rate will remain among the lowest in the country. But more states are starting to experience labor shortages, which reduces the incentives their residents have to relocate, especially to a higher-cost state.

“It will be hard to rely on migration to really replace these jobs. Throw on top of that an uncertain international immigration environment and you will have tight labor markets,” Wobbekind said.

U.S. Census Bureau counts also show that the number of people who left Colorado for other states last year rose sharply, which if it continues could weigh on the economy.