The Colorado economy should continue to grow through the second half of 2015 with payroll gains topping 61,000 by the end of the year, according to a university forecast.
Midway through the year, though, Mesa County still lags behind statewide averages for growth in employment, personal income and home prices.
The research division of the Leeds School of Business at the University of Colorado at Boulder prepares an annual economic forecast for the state based on the recommendations of more than 100 business and government professionals statewide who serve on a steering committee. CU offers a midyear update to the forecast.
The update is mostly upbeat, said Richard Wobbekind, an economist who serves as executive director of the research division. “GDP is strong, personal income is strong and a lot of the sectors are doing very well.”
“Right now we’re very, very close to our forecast released in December,” Wobbekind added. “At this point, we’re pretty comfortable staying at the overall projected job level.”
A net gain of 61,300 jobs were forecast. Through May, Colorado payrolls had increased 2.5 percent on a year-over-year basis, Wobbekind said.
In Mesa County, however, year-over-year job growth through May was pegged at about 1.5 percent, the second-lowest rate of seven metropolitan areas compared in the midyear update. While the statewide seasonally adjusted unemployment rate stood at 4.3 percent in May, the seasonally unadjusted jobless rate stood at 5.9 percent in Mesa County, the second-highest level of the seven metro areas.
Per capita personal income in Colorado was estimated at $46,897 based on annual data for 2013. With per capita income of $37,222, Mesa County was among three metro areas in the state below $40,000.
Home prices statewide rose 9.4 percent between the first quarters of 2014 and 2015, according to the Federal Housing Finance Agency. In Mesa County, home prices appreciated 4.93 percent during the same span, the second-lowest level among the seven metro areas.
The midyear update includes projections for each of the major industry sectors.
The biggest job growth was forecast for the professional and business services sector with 12,800 net new positions. Wobbekind said Colorado remains a “hub of activity” for the aerospace, consulting and legal industries that require skilled employees and offer high-paying jobs. Through May, employment in the sector had expanded 1 percent and added 3,700 jobs on a year-over-year basis.
The leisure and hospitality sector was projected to add 11,200 net new jobs with increases in lodging and visits to national and state parks and other public lands. The Colorado ski industry captures 21 percent of the national market for overnight trips. Through May, employment in the leisure and hospitality sector had grown 4.5 percent, Wobbekind said.
The forecast called for a net increase of 9,300 jobs in the education and health services sector for 2015. Through May, health care and social assistance payrolls alone had grown 14,500, Wobbekind said.
Employment in the trade, transportation and utilities sector was projected to increase 9,100. Payrolls in the sector had edged up a tenth of a percent through May after a net gain of 10,800 jobs in 2014. Wobbekind said employment is expected to pick up with the completion of a hotel and transit center at the Denver International Airport and commuter rail line connecting Denver and the airport.
The construction sector was forecast to add 6,000 jobs in 2015. While construction payrolls have increased since the beginning of 2012, employment has yet to rebound to prerecession levels, Wobbekind said. Demand remains high, though, for new homes.
The natural resources and mining sector was projected to add 2,300 to payrolls. As of May, the sector accounted for 34,500 jobs, less than the forecast of 36,000 jobs. Oil prices, a key factor in driving exploration and production, are expected to remain low, Wobbekind said. The potential closure of a large coal mine in Northwest Colorado under a lawsuit also could affect the sector, he added.
Colorado manufacturers are forecast to add a total of 2,200 jobs in 2015, and the sector so far has exceeded expectations, Wobbekind said.
An improving outlook for fruit and wine grape harvests in Western Colorado add to a mostly upbeat forecast for the agriculture industry in Colorado. Spring rains helped ranchers grazing cattle, but also increased the potential for disease in wheat and delayed planting for corn. Colorado agriculture exports were down about 1 percent through the first quarter, but are expected to hold steady.
International trade continues to increase in Colorado with a 5.6 percent year-over-year gain in exports as of March. Top exports include industrial machinery as well as optical, medical and surgical devices. The top markets for Colorado exports include Canada, Mexico, China, Japan and the Netherlands.
Employment has grown modestly in the financial activities sector in Colorado. But growth in the information sector hasn’t translated into additional employment. Increased staffing in local and state government is expected to offset cuts in federal government jobs.