Phil Castle, The Business Times

Employment is expected to return to pre-pandemic levels in Colorado in 2022, according to the latest results of an annual business and economic forecast.

But some industry sectors will continue to lag, says Rich Wobbekind, senior economist at the Leeds School of Business at the University of Colorado at Boulder. “The hole left by the COVID-19 pandemic in the leisure and hospitality sector is huge. We don’t anticipate the leisure and hospitality industry to return to pre-pandemic levels until 2023 or 2024.”

Moreover, Colorado likely will fall out of the top 10 states for employment growth, Wobbekind says.

The business research division at the Leeds School of Business compiles the forecast with sections for various industry sectors and geographic regions. Business, industry and government officials contribute to the report. 

Nonfarm payrolls in Colorado are forecast to increase 73,900 in 2022 as the state finally recoups jobs lost to the pandemic and related restrictions. Gains are expected in all 11 industry sectors.

The leisure and hospitality sector is expected to experience the largest increase at 31,700, but also suffered the biggest decrease in the pandemic.

Professional and business services are expected to 8,200 jobs, followed by government at 7,000, education and health services at 5,900 and financial activities at 5,100. Payrolls are forecast to grow 4,900 in the trade, transportation, and utilities sector and 4,000 in construction. At 600 each, the smallest job gains are expected for the natural resources and mining and information sectors. 

Wobbekind says the forecast reflects what he describes as tailwinds and headwinds. But uncertainty also persists, including the potential effects of labor shortages, supply chain issues and inflation. 

A rebound in tourism and increase in outdoor recreation have helped to bolster the leisure and hospitality sector, although concerns about the COVID-19 pandemic and labor shortages continue to present challenges, Wobbekind says.

An increase in construction activity, particularly residential construction, is expected to continue in 2020 with the addition of another 48,000 single family and multifamily units.

The natural resources and mining sector is expected to add back jobs for the first time in two years.

A growing population also will play a role. According to estimates from the Colorado State Demography Office, the population will grow 61,000 in 2021 with a net in-migration of 40,000.

Over the long term, Wobbekind says he expects the top drivers of growth to include aerospace, biopharmaceuticals, cannabis manufacturing and warehousing.

Tailwinds likely to promote growth include increases in personal income and retail spending as well as an increase in spending on infrastructure as part of federal legislation, he said.

Headwinds include the potential effects of new COVID-19 variants, a drought that’s hurting farmers and ranchers and the growing number of people unwilling to return to the work force.

Still other things remain uncertain, Wobbekind says. They include the effects of monetary and trade policies, lower birth rates and the portion of the labor force that continues to work at home.