State set to retain economic lead despite slowing growth – Loveland Reporter-Herald

Since the COVID-19 outbreak in early 2020, the economy in Colorado and across the country has been on a rollercoaster ride. While the greatest upheaval and cycle may be behind us, we’re not quite ready to emerge from this pandemic — and the roller coaster has not been bad.

Even three years later, “I don’t think we’ve fully overcome the it”.

From worker shortages to supply chain disruptions to the productivity of working from home, the economic system is still digesting the dynamics caused by COVID-19.

“I don’t think it’s fully resolved,” Lewandowski said. “I don’t think we’re entirely in the new normal.”

Lewandowski and Rich Wobbekind, dean of business studies and senior economist at CU Boulder’s Leeds School of Business, have spent the past year writing CU’s 2023 Colorado Business Economic Outlook report. Wobbekind and Colorado demographer Elizabeth Gardner presented the report’s findings Monday at an economic summit in Denver.

The upshot, Wobbekind said, is that “jobs are growing at about half the pace of this year, so the economy is definitely going to slow.”

According to the report, “While headwinds appear to be easing, losses in 2023 will be measured in sluggish growth — just 0.2 percent, according to the November 2022 consensus forecast. Business Research is moderately optimistic, with growth forecast at 0.6 percent, followed by The U.S. economy fell into recession in the first half of the year, followed by faster growth in the second half of the year.”

In a presentation Monday afternoon, Wobbekind said it wasn’t one or two sectors that were not expected to be a drag on overall growth. “Growth in almost every industry is expected to be slower than in 2022.”

Colorado’s unemployment rate is expected to rise from 3.5% this year to 4.1% next year, a figure that points to an extremely tight labor market.

Across a range of indicators, “Colorado’s economy will outperform most of the nation in 2022,” the report said. “The state ranked seventh in second-quarter GDP growth of 3% year-over-year, compared with a national decline of 1.8% and a simple average of 1.3% for the 50 states.”

Locally, the Boulder Valley and Northern Colorado economies are expected to be impacted by national trends and headwinds, but should remain strong, depending on the specifics of their regional industry mix.

“A lot of the sectors that are doing well economically are (areas of the economy where Boulder Valley is involved): life sciences, aerospace, manufacturing,” Wobbekind said.

The energy sector, which has struggled in recent years, is expected to rebound in 2023, a boon for oil-dependent northern Colorado communities.

“Colorado, like other energy-rich states, will benefit from increased demand for more energy and mineral resources as the COVID-19 pandemic enters the economy’s rearview mirror,” the report said. The industry “is expected to continue growing in 2023. The job gains were driven in part by an environment of persistently high domestic and global oil and gas prices.”

Additional industry highlights from the 2023 Colorado Business Economic Outlook report include:


The near-term success of Colorado’s agricultural sector depends largely on the ability of operators to control costs. That’s especially true in Weld County, by far the most predominantly agricultural county in Colorado.

Farmers are benefiting from higher crop prices, but “these gains will be outweighed by the prices of the feed, labor and other inputs needed to raise livestock and grow crops,” the outlook said. “Almost every input is more expensive for farmers and ranchers today than it was a year ago. Fuels, seeds, pesticides, and especially fertilizers are all up.”

CU economists expect “total net farm income … to decline by more than $1 billion to $852 million by 2022,” the report said. “The situation is expected to be even worse in 2023, as net farm income is expected to continue to decline to $772 million.”

put up

A tale of two subsectors is emerging in the construction industry, with residential and commercial moving in different directions.

“Residential construction — especially single-family homes — is rapidly facing significant downward pressure, while the amount of infrastructure (‘non-building’) is growing to record levels,” the outlook report said. “Vertical; non-residential buildings other than residential have their own buildings. These trends will continue until 2023.”

Like many other industries, construction is expected to “continue to suffer from labor shortages, delays in the supply of key components, and price increases above the average rate of inflation”.

Colorado’s overall economic and workforce strength has been and will continue to be a boon for commercial builders.

“The outlook for continued strength reported by economic development agencies should lead to business expansion and relocation in the Denver metro area, driving more activity in the commercial and industrial subsector,” the report said. “Another positive market force is strong bioscience and healthcare demand.”


Colorado has outpaced national competition as manufacturing rebounds from the COVID-19 pandemic.

“As of September 2022, manufacturing in Colorado is approximately 2.3 percent above pre-pandemic levels, compared with 0.7 percent nationally,” CU’s report said. “…next year, manufacturing employment is projected to grow 0.3 percent, as losses in the computer and electronics and other durable goods categories weigh on continued growth in several other subsectors.”

financial activities

Financial institutions generally shy away from volatility, and the past three years are nothing without volatility.

“(A) Volatility follows when the environment is in turmoil, when social and/or economic fundamentals are constantly changing,” the report said.

As a result, the financial activities sector “underperforms other industries, growing by only 0.6% in 2022,” according to the outlook. “Growth is expected to slow in 2023, losing 2.2 percent or 4,000 jobs.”

Professional and Business Services

Professional and business services (PBS) provided notable relief to the struggling financial activities sector, which “emerged from the pandemic far stronger than other sectors and poised to continue its long tradition of strong growth,” the report said. “…PBS employers typically retain trusted talent to serve clients and generate revenue, while deliberately avoiding any layoffs, as they are acutely aware of the challenges of recruiting and retaining talent in this very tight market. Difficulty.”

The outlook predicts, “Employment at PBS will grow by another 7.3% to an average of 485,800 jobs in 2022. Despite any headwinds, growth will continue at a modest 4.2% to 506,100 in 2023.” “

leisure and hospitality

In the early days of the pandemic, few industries have seen such dramatic changes as the hospitality industry. While the industry has bounced back, the abyss it found itself in in 2020 makes that recovery a bigger challenge for other industries.

“During 2021, demand for leisure and hospitality services returned as vaccination rates increased and public health restrictions eased. The rapid recovery in demand for these services led to a rise in the number of vacancies in 2021 and 2022. historic growth as employers sought to hire workers in the industry,” the report found. “However, the pandemic has exacerbated workplace conditions and reduced labor supply, lagging behind increased demand for workers.”

While the hospitality industry has returned to pre-pandemic employment levels, “it has lagged behind the respective growth of most other industries in Colorado over the same period,” the CU economist said.

Employment in this field is expected to grow by a modest 3.2% in 2023.

This article was first published by independent news organization BizWest and published under a license agreement. © 2022 BizWest Media LLC.

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