Colorado’s economy outpaced national averages in unemployment rate and job growth in 2015, and the outlook for 2016 remains strong.
Colorado’s unemployment rate was far lower than the national average of 5.0%, finishing 2015 at 3.3%. In fact, Colorado’s overall unemployment has dropped so low that an influx of new residents will be critical to filling the new jobs expected to become available in 2016. Job growth rose 1.9% in 2015, which kept in line with the national rate; however, the state is expected to experience an increase of 2.6% in 2016, according to University of Colorado Boulder economists.
Several key Colorado industries experienced even greater growth. The Construction, Manufacturing and Healthcare industries saw increased job growth of 8.0%, 3.5% and 3.6%, respectively. Colorado is expected to continue its trend of adding service industry jobs, as well as jobs in the goods-producing sectors.
Only the Oil and Gas industry experienced considerable contraction in 2015, and it is expected to continue its decline into 2016. Job growth for natural resources in 2015 declined by 3.9% as a result of plummeting oil prices, yet natural resource sectors reached record levels of production. Colorado’s most valuable commodities, crude oil and natural gas, will continue to bring in revenue, but are expected to perform in 2016 similarly to 2015.
The national unemployment rate finished 2015 at 5.0%. The majority of Colorado’s large cities outperformed that rate with Denver at 3.1%, Colorado Springs at 4.0%, Fort Collins at 2.8% and Boulder at 2.6% The unemployment rate is expected to continue to drop; however, the pace is expected to slow in 2016 as unemployment and job growth equalize.
Going forward, the talent gap will likely pose however the biggest challenge to the state’s employers. As baby boomers exit the workforce, the talent gap remains a long-term concern, which is expected to drive up wages for qualified individuals.
Nevertheless, with low unemployment, high job growth, increased migration and the quality of life appeal that Colorado offers, the state remains positioned for continued economic growth in the coming year.
CU Leeds School of Business – Business Economic Outlook, 2016
First Research – Colorado State Profile
Federal Reserve Bank of Philadelphia