Colorado should regain the jobs lost during the early months of the pandemic sometime next year, but the state won’t be a leader for its post-pandemic economic recovery, according to the 2022 Colorado Business Economic Outlook.
The detailed annual forecast, released Monday by the University of Colorado Boulder’s Leeds School of Business, is calling for the state to add 87,600 nonfarm jobs in 2021, a growth rate of 3.3%. Another 73,900 jobs are projected in 2022, which represents a growth rate of 2.7%.
Colorado lost a staggering 376,000 jobs from February to April of 2020 because of the pandemic and as of October had gained back 313,000 jobs. The rest of the shortfall should be recouped next year.
But this rebound will play out differently than the recovery from the Great Recession. Back then Colorado regularly ranked in the top five or 10 for annual job growth, making the Front Range a popular landing spot for young workers looking to launch their careers.
“These numbers don’t indicate we will end up being a top 10 state. Top 15 maybe, more likely somewhere in the 15 to 20 range,” said Richard Wobbekind, senior economist at the Leeds School of Business.
Wobbekind said if he could attribute the lagging performance to one thing, it would be the size of the state’s higher concentration of service jobs, particularly in leisure and hospitality, a sector hard hit by travel restrictions and closures last year.
Leisure and hospitality, which cover hotels, restaurants and entertainment venues, won’t see employment return to pre-pandemic levels until 2023 and 2024, despite leading job growth next year with a 10.4% gain, Wobbekind said.
Colorado Springs, which is leading the state with a 4.7% rate of annual job growth through October, is the only metro area in the state back to its pre-recession peak for jobs. Denver and Boulder were close behind at 4.6% and Greeley was at 4.5%. Fort Collins had a job growth rate of 1.6%, followed by Pueblo at 1.3% and Grand Junction at 1.1%.
The state’s unemployment rate, which was at 5.4% in October, is expected to average 4.2% next year, down from an average rate of 5.6% this year and 7.3% in 2020.
Between an aging population and more fatalities linked to COVID-19, deaths are on the rise. The pandemic also appears to have put a damper on births, pushing birth rates to under 1.5 in Colorado and 1.6 in the U.S. last year. Current rates are below the population replacement rate of 2.1.
The state won’t be able to rely as much on in-migration to compensate for a falling birth rate as it has in prior decades. International immigration is down 70% in both 2019 and 2020 compared to the pace between 2010 and 2018, while domestic migration is down by about 35% compared to the 2010 to 2018 period. The outlook calls for the state’s population to reach 5.83 million this year, a gain of 45,400, of which net migration will represent 30,000.
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