Colorado can expect stability—but no growth—in 2010

Colorado will fare better in 2010 but will continue to shed jobs, CU’s economist says.

The state’s economy will return to stability, however, according to Richard Wobbekind of the University of Colorado at Boulder’s Leeds School of Business.

Wobbekind’s announcement was part of the 45th annual Colorado Business Economic Outlook Forum hosted Monday by CU-Boulder’s Leeds School of Business and BBVA Compass bank.

“We still have some serious kinks to work through, but we see 2010 as a stabilizing year that will put the state economy in a position for more sustained growth in 2011 and 2012,” Wobbekind said in a statement issued with the release of the report.

The forecast calls for a loss of 3,200 jobs in 2010, compared with the 100,000 jobs the state lost in 2009. Job losses will continue through the first quarter, before leveling off in the second quarter and moving into positive growth in the third and fourth quarters, according to Wobbekind.

“I think people will be disappointed to hear that we think there will be continued job loss in 2010, but in relative terms it will seem like we’re in recovery because the job loss is very small compared to what has happened in 2009,” Wobbekind said.

The economist noted that the past decade has been marked by poor job creation, with just 117,900 jobs added since 2000, while Colorado’s population increased by 870,000.

“Over the last decade we really haven’t generated the number of jobs that we need for the growing population of this state,” he said. “Our recent job growth is very low compared to the past three decades.”

Unlike the 2002-03 recession – which hit urban centers hard – the current recession has been toughest on the state’s rural areas, especially because of the decline of tourism, Wobbekind said.

“In addition it’s hurt the energy industry, which is concentrated on the eastern plains and the Western Slope,” he said. “The combination of those two sectors along with a slowdown in agriculture means many rural jobs lost.”

Among the strongest sectors for projected job growth in Colorado in 2010, according to Wobbekind:

* Professional and business services — including engineers, computer systems designers and scientific research and development groups. The sector is expected to add 6,500 jobs in 2010, compared to 16,100 jobs added in 2007.

* Education and health services — expected to add about 6,600 jobs in 2010.

Construction, manufacturing and financial services sectors will lead in job losses next year, Wobbekind said. In 2010 construction is projected to lose 9,000 jobs, manufacturing 3,800 and financial services 2,900.

“In construction we do see a slight uptick in home building in 2010, but we don¹t see an increase in commercial development given the current vacancy rates,” he said. “Overall, it’s going to take longer for this sector to recover.”

Retail sales are projected to grow by 3 percent in 2010, compared to a 12 percent decline in 2009. The trade, transportation and utilities sector, which includes retail trade, will add 2,700 jobs in 2010.

Even though many areas in Colorado have experienced a large number of foreclosures, other factors such as steady prices have led to a stable housing market for most of the state, and Wobbekind doesn¹t expect that to change in 2010.

“Colorado’s housing market is very stable and is one of the reasons we could see Colorado returning to positive growth in sync with the national economy, even though the state went into recession later than the nation as a whole,” he said.

Colorado’s unemployment rate for 2010 is expected to increase from 7.3 percent at the end of 2009 to 8.1 percent, compared with a projected national unemployment rate of 9.8 percent.

Compiled by the Leeds School’s Business Research Division, the Colorado Business Economic Outlook for 2010 features forecasts and trends for 13 business sectors prepared by more than 90 key business, government and industry professionals.

To view the entire report, including an overview of each of the state’s major economic sectors, visit http://leeds.colorado.edu/ and click on The Economy: 2010 Forecast.

To view the Leeds School’s Business Research Division blog visit http://www.cuboulderblogs.com/brd/.

To view a short video of Wobbekind discussing the economic outlook for Colorado in 2010 visit http://www.colorado.edu/news/.

Editor’s note: This article was edited from a press release issued by the University of Colorado.

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