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Revised economic outlook calls for faster job growth in Colorado

Rick Wobbekind

Job growth in Colorado remains on pace to add about 35,000 positions by the end of the year, a gain that likely will rank among the top states nationally.

Job growth also reflects economic growth, said Richard Wobbekind, an economist at the Leeds School of Business at the University of Colorado in Boulder.

“You might say it’s balanced growth, which is symptomatic of a broad-based recovery in the economy,” Wobbekind said. “Both primary and feeder industries have picked up, and we’ve seen job growth in most industries, including tourism, natural resources, transportation and utilities, with significant strength in the tech sector.”

As executive director of the Leeds School of Business Research Division, Wobbekind prepares and presents an economic forecast for Colorado each December. He recently met with a forecast steering committee that includes representatives from major industry sectors for a mid-year update.

With the exceptions of the government and information sectors, every industry reported year-over-year growth in employment, Wobbekind said.

Midway through the year, the rate of job growth is up to about 1.6 percent, he said. At that pace, payrolls will grow about 35,000 by the end of the year and Colorado will rank sixth nationally for job growth.

The initial forecast presented in December called for 23,000 net new jobs.

The value of commercial and residential construction in Colorado could nearly double compared with 2011, he said.

The agricultural sector is doing well after a record-breaking year in 2011, although low crop yields related to drought pose a concern going forward, he said.

The tourism sector has faced setbacks with a mild winter that curbed skiing business and, more recently, wildlfire.

On the other hand, mild winter weather helped the construction sector, Wobbekind said. “One industry’s downfall is another industry’s benefit.

The tourism industry suffered from having a warm winter, if you will, and low snowfall. But the construction industry benefits from a warmer January, February and March because they can start construction projects earlier, pull permits earlier and get crews out earlier.”

Lower prices for natural gas have hurt energy producers, but helped consumers.

“Natural gas prices are lower, and that actually is causing the production value of oil to be greater than the value of natural gas right now,” said Brian Lewandowski, a research associate with the Leeds School of Business Research Division. “While it’s kind of a bust for producers, it’s really good for consumers. A lot of our energy is now produced from natural gas.”

Wobbekind said he expects labor demand in the education sector to increase along with enrollment in colleges and universities in Colorado.

He attributed the trend in part to people who’ve lost jobs and  have sought additional education to update their skills or change careers.

But even as enrollment increases, the state government faces difficulty in funding higher education, he added.

The situation is likely to persist for colleges and universities without changes in taxation or revenue sources, he said. “It takes an overhaul of the tax system. It takes a change in revenues somehow or other, or it just is a trend that we live with and we figure out a way to fund ourselves more entrepreneurially.”

Job growth in Colorado remains on pace to add about 35,000 positions by the end of the year, a gain that likely will rank among the top states nationally.

Job growth also reflects economic growth, said Richard Wobbekind, an economist at the Leeds School of Business at the University of Colorado in Boulder.

“You might say it’s balanced growth, which is symptomatic of a broad-based recovery in the economy,” Wobbekind said. “Both primary and feeder industries have picked up, and we’ve seen job growth in most industries, including tourism, natural resources, transportation and utilities, with significant strength in the tech sector.”

As executive director of the Leeds School of Business Research Division, Wobbekind prepares and presents an economic forecast for Colorado each December. He recently met with a forecast steering committee that includes representatives from major industry sectors for a mid-year update.

With the exceptions of the government and information sectors, every industry reported year-over-year growth in employment, Wobbekind said.

Midway through the year, the rate of job growth is up to about 1.6 percent, he said. At that pace, payrolls will grow about 35,000 by the end of the year and Colorado will rank sixth nationally for job growth.

The initial forecast presented in December called for 23,000 net new jobs.

The value of commercial and residential construction in Colorado could nearly double compared with 2011, he said.

The agricultural sector is doing well after a record-breaking year in 2011, although low crop yields related to drought pose a concern going forward, he said.

The tourism sector has faced setbacks with a mild winter that curbed skiing business and, more recently, wildlfire.

On the other hand, mild winter weather helped the construction sector, Wobbekind said. “One industry’s downfall is another industry’s benefit.

The tourism industry suffered from having a warm winter, if you will, and low snowfall. But the construction industry benefits from a warmer January, February and March because they can start construction projects earlier, pull permits earlier and get crews out earlier.”

Lower prices for natural gas have hurt energy producers, but helped consumers.

“Natural gas prices are lower, and that actually is causing the production value of oil to be greater than the value of natural gas right now,” said Brian Lewandowski, a research associate with the Leeds School of Business Research Division. “While it’s kind of a bust for producers, it’s really good for consumers. A lot of our energy is now produced from natural gas.”

Wobbekind said he expects labor demand in the education sector to increase along with enrollment in colleges and universities in Colorado.

He attributed the trend in part to people who’ve lost jobs and  have sought additional education to update their skills or change careers.

But even as enrollment increases, the state government faces difficulty in funding higher education, he added.

The situation is likely to persist for colleges and universities without changes in taxation or revenue sources, he said. “It takes an overhaul of the tax system. It takes a change in revenues somehow or other, or it just is a trend that we live with and we figure out a way to fund ourselves more entrepreneurially.”

The Business Times has served as the definitive source for Grand Junction business news since 1994. The journal offers news, views and advice you can use twice each month in print with daily updates online at www.TheBusinessTimes.com
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