Maintaining a multi-year growth period, Colorado’s 2019 economic outlook remains cautiously positive, according to Colorado Business Economic Outlook Forum committee chairpersons.
The bright spot for Coloradans is personal income, which rose 5.1 percent in the first quarter of 2019, making it fifth in the nation. Per capita personal income grew 3.6 percent – the twelfth highest gain in the U.S., says the recently released Mid-Year Economic Report by the Business Research Division at CU-Boulder’s Leeds School of Business.
Colorado also outpaced the U.S. in home price and employment increases.
Economic growth continued through June 2019, though slower since strong reacceleration in 2018. Over that period, year-over-year employment growth slowed to 1.5 percent from 2.8 and real GDP growth slowed to 3.5 percent from 4.5.
Though slowing, Colorado continues to outpace the nation’s real GDP growth of 2.9 percent. Forecasts predict slower U.S. growth of 2.6 percent in 2019, due in part to the waning effects of the tax cuts and uncertain foreign policy.
Business leaders maintain more confidence in the Colorado economy than the national economy, according to the Leeds Business Confidence Index.
Job growth across the state continues to grow with a 1.9 percent increase predicted for the year. Unemployment rates are the 13th lowest in the nation, posting three percent in June 2019, which continues to outperform the overall U.S. unemployment rate of 3.7 percent.
Boulder and Fort Collins-Loveland have the lowest unemployment rates in the state, with 2.3 percent, followed by Greeley at 2.5 percent, and Denver-Aurora-Lakewood at 2.7 percent. Colorado Springs and Grand Junction are each at 3.3 percent unemployment.
Boulder also topped the state for year-over-year employment growth. At 2.9 percent, Boulder was followed closely by Grand Junction with 2.5 percent, Greeley with 2.4 percent, and Colorado Springs with 2.4 percent. Denver-Aurora-Lakewood, Fort Collins, and Pueblo rounded out the metropolitan areas with 1.4, 1, and 0.6 percent growth, respectively.
Professional and business services led with 6.2 percent job growth. The remaining employment growth is:
• Other Services: 4 percent
• Natural Resources and Mining: 2.1 percent
• Leisure and Hospitality: 2.1 percent
• Education and Health Services: 2 percent
• Government: 1 percent
• Construction: 0.9 percent
• Manufacturing: 0.8 percent
• Information: 0 percent
• Financial Activities: Minus 1.3 percent
Population growth continues placing Colorado as the seventh fastest growing state and 21st in total population overall. But the Boulder metropolitan area is one of the slowest growing in the state, along with Grand Junction and Pueblo. Growth rates were 0.6 to 1.2 percent.
To meet the continued demand for housing, new units increased 13 percent. For single-family housing, contracts and starts decreased sharply in the latter half of 2018, but permits increased 7.4 percent over 2017. Through May 2019, single-family permits decreased 18.4 percent year-over year, while multifamily permits slid 30.3 percent.
Despite the decrease in permit activity, there is still a lot of unsatisfied demand, report members of the Colorado Business Economic Outlook Forum.
Construction employment grew 5.3 percent in 2018 and 1.4 percent year-to-date as of June 2019. The skilled labor shortage is an ongoing challenge for the industry. According to the Bureau of Labor Statistics, total construction industry employment increased 0.9 percent year-over-year.
Average annual pay for state construction workers in 2018 was $62,414, above the average Colorado pay of $58,942. Constraints include an increasing number of construction workers retiring with fewer younger individuals filling those jobs, and an unstable U.S. immigration policy limiting workers entering the workforce.
Read the full Mid-Year Economic Report at colorado.edu/business/sites/default/files/attached-files/cbr_2019_midyear_issue.pdf.
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, e-mail Tom at firstname.lastname@example.org, call 303.441.5620 or visit boulderco.com.