Colorado anticipates job growth amid economic challenges
Despite headwinds of rolling recessions, persistent inflation, elevated interest rates, workforce shortages and sluggish consumer spending, Colorado’s industries stand poised to add jobs in 2024 – and that bodes well for real estate.
According to the 2024 annual Business Economic Outlook, jointly released by the Business Research Division (BRD) at the Leeds School of Business and the state of Colorado, rising from a near all-time low of 2.6%, the state’s employment increased an estimated 2.2% in 2023, adding 64,500 jobs. In October 2023, Colorado’s unemployment rate stood at 3.3% — a record 2.9 million jobs which tied for 26th among all states, reported BRD. The state had the fifth-highest labor participation rate in the country and outranked 31 other states in its labor force growth rate.
BRD projects an increase of 41,900 jobs in 2024 or a 1.4% increase in employed workers.
Of Colorado’s 11 major industry groups, BRD expects seven to witness job additions in 2024, signaling resilience in the face of economic challenges. However, industries such as construction, manufacturing, information, and financial activities are grappling with amplified adverse effects due to rising interest rates and other economic challenges.
In 2023, the Construction sector saw divergent trends, with the residential market experiencing subdued demand amidst highinterest rates, while nonbuilding infrastructure projects continued to gain traction. Despite an overall decline in total construction activity, estimated at $20.9 billion, the Business Economic Outlook notes a promising future with millennials entering the home-buying phase and migration to Colorado persisting as the state remains an attractive destination for primary and secondary home buyers.
BRD expects the multifamily construction segment to contract in 2024, partly due to the completion of numerous ongoing projects meeting apartment demand. Conversely, nonresidential building and nonbuilding construction are poised to maintain stability in the upcoming year.
For the manufacturing sector, which recently posted its fastest growth pace since 2018, highinterest rates and shifting consumer behavior posed challenges that resulted in a loss of an estimated 500 jobs in 2023. For 2024, BRD expects respite from federal investment and incentives that are predicted to increase employment for areas that support aerospace and defense. The Inflation Reduction Act and CHIPS Act will boost the state’s renewable energy and computer and electronics manufacturers.
The Business Economic Outlook outlines several sectors poised for job expansion in 2024:
Professional and Business Services: This sector, concentrated along the Front Range, leverages highly skilled and highly educated workers. Moderate growth rates of 3.4% and 2.9% are projected for 2023 and 2024, respectively.
Government: With nearly one in six jobs in the state, BRD anticipates steady growth in state government employment, fueled by new initiatives.
Education and Health Services: Employment gains in nursing and residential care facilities and increased job opportunities in private education services are anticipated.
Trade, Transportation, and Utilities: Continued consumer spending, particularly online, is expected to drive employment growth in warehousing and delivery services.
Leisure and Hospitality:
The skiing industry enjoyed an exceptional 2022–23 season, setting a second consecutive record for skier visits. Looking ahead to 2024, the industry is forecasted to grow at a moderate pace of 1.4%, buoyed by robust travel spending, with continued challenges from inflation and supply chain issues.
Other Services: The diverse businesses in this sector, such as car washes and beauty salons, are poised for modest job growth of 1% in 2024.
Natural Resources and Mining: This sector, comprising a small portion of the workforce, grew an estimated 4.3% in 2023, with growth expected to continue in 2024. This sector has some of the state’s highest per-worker income levels.
One bright spot stood out in the BRD assessment: Colorado’s craft brewing industry continues to thrive and is noted as the fifth largest in the country in 2022. The Brewers Association reported the state had 440 craft breweries and