Phil Castle, The Business Times

Employment is expected to grow in Colorado next year, but not enough to recoup job losses attributed to the COVID-19 pandemic and related restrictions.

Payrolls are expected to increase 40,500 in 2021, about a third of estimated job losses for 2020, according to the latest Colorado Business Economic Outlook.

The short-term outlook depends on the effects of the pandemic, the availability of vaccines and the extent to which the economy reopens, said Richard Wobbekind, senior economist at the Leeds School of Business at the University of Colorado at Boulder.

The long-term outlook depends on how much the pandemic changes consumer behaviors, including online shopping, remote work and travel.

The research division of the Leeds School of Business compiles the Colorado Business Economic Outlook with contributions from business, education and government officials across the state.

Wobbekind discussed the 2021 forecast during an online presentation for the media.

The two industry sectors hit hardest by the pandemic in 2020 are expected to recoup the most jobs in 2021, Wobbekind said.

Employment is expected to increase 19,200 in the leisure and hospitality sector and 14,700 in the trade, transportation and utilities sector.

Payrolls are forecast to increase 4,500 for the education and health services sector, 4,400 for professional and business services, 2,500 for financial activities and 2,300 for manufacturing.

The natural resources and mining sector likely will gain about 400 net new jobs in 2021 as oil and natural gas prices move higher, Wobbekind said.

Government payrolls are predicted to decline 6,900 as budgets shrink, he said. The information sector, which includes media companies, is expected to shed 1,100 jobs.

Changes prompted by the pandemic — including the shift to working from home — will continue to affect everything from commercial real estate to retail sales to transportation, Wobbekind said.

The Colorado population is expected to increase 53,300 in 2021 — the slowest pace of growth since 2003. But the state remains an attractive place to live and work with comparably lower costs and a high quality of life, Wobbekind said. As technology makes it possible for some people to work anywhere, there could a move to more rural areas of the state.