The Colorado economy is making a strong comeback, but not one strong enough to restore all the jobs lost in March and April by the end of the year, according to a revised economic forecast from the Leeds Business Research Division at the University of Colorado Boulder.
In December, the annual Colorado Business Economic Outlook predicted the state would add 40,100 non-farm jobs in 2020, the slowest pace of gains since 2011. What the estimating groups and almost everyone else didn’t see coming was a pandemic.
The mid-year update now predicts a loss of 128,500 nonfarm jobs in Colorado, which works out to a decline of 4.6% for the year. As bad as that sounds, the state shed 342,000 in March and April. It has gained 126,000 back in May and June, but still has a long way to go.
“We think the recovery in the coming months will be slower than what we observed in May and June, the initial snapback from closed to open,” said Brian Lewandowski, executive director of the Leeds Business Research Division, in an email. Rather than a V-shaped recovery many are banking on, he thinks Colorado is tracking a U or swoosh-shaped recovery.
There is an outside chance for a double-dip recession or W-shaped recovery, but Lewandowski said that would require another round of widespread closures, something he doesn’t envision happening. But then again, nobody envisioned the closures that hit in March.
“We have no context, nationally or in Colorado, in which to assess this magnitude of economic devastation,” said Richard Wobbekind, senior economist and faculty director of the Leeds Business Research Division, in comments accompanying the report. “We can try and compare it to the Great Recession, but the numbers are orders of magnitude different. We never shut the economy down before.”
As they have from Day 1, leisure and hospitality workers will continue to bear the brunt of pandemic-related job losses, with employment in that sector ending the year down 22.3% or 76,700 jobs. That equates to about three out of every five jobs the state is expected to lose this year.
Airlines are also looking at major job reductions come October if they don’t receive more federal assistance. The trade, transportation and utilities sector, which includes retail and airline jobs, is projected to shed 13,000 positions, a 2.7% decline.
Professional and business services are expected to fare the best, with jobs declining only 0.2%.
The recession has hit metro areas with varying intensity. As of June, Grand Junction had the smallest annual job losses at 2.2%, followed by Boulder at 4.1%, Pueblo down 4.4%, Colorado Springs down 4.7%, Fort Collins down 5.8%, Greeley off by 6.2% and metro Denver down 6.7%, according to the revised CBEO.
The CBEO projects slower state population growth with fewer people moving to Colorado, fewer births and increased deaths because of COVID-19. Still, the state’s population could top 5.8 million, up from 5.77 million in 2019. And there are anecdotal reports that residents from harder-hit and more crowded states are looking at landing in Colorado, something that a shift to remote work arrangements makes easier.
