A new forecast of Colorado’s economy is bullish on the state’s recovery looking ahead into 2022.
The forecast was presented during the 57th-annual Colorado Business Economic Outlook (CBEO) Forum that was held on Monday by the University of Colorado Boulder’s Leeds School of Business.
“We are pretty bullish on the macro economy, but there are certain things that are creating uncertainty going forward,” Dr. Richard Wobbekind, a senior economist at Leeds, said during his introductory remarks.
According to the CBEO report, Colorado’s economy performed “above average” during the pandemic with the state’s gross domestic product (GDP) leading the national average by 0.3 points in 2020.
Meanwhile, year-over-year GDP growth remains strong at 11.8% in the second quarter of 2021. The state also has an overall jobs deficit of just 2.2% when compared to pre-pandemic levels, the report said.
Looking ahead to 2022, CBEO projected that Colorado’s job growth rate will be 2.7% in 2022, representing an addition of more than 73,900 jobs altogether.
For comparison, Colorado’s job growth rate in 2021 is projected to be 3.3% with more than 83,000 jobs added.
One area of concern for the economy is the state’s elevated unemployment rate, the CBEO said. Colorado’s unemployment rate currently stands at 5.4% compared to the national 4.2% average, despite the state having the 11th best workforce participation rate in the country, the report added.
Wobbekind said that Colorado is one of several states in the nation where the number of job openings actually exceeds the number of unemployed persons.
“The jobs are there,” Wobbekind said. “They may not be the right fit, or structurally different, or what a person is looking for, but the jobs are there.”
Another area of concern for some economists is Colorado’s employment-to-population ratio, which is a measure of labor market performance.
In 2019, Colorado’s employment-to-population ratio was 66.9, meaning 66.9% of working-aged adults were employed. The next year, the ratio fell to 57 and recently climbed back up to 64.5 in October.
CBEO said this result is “consistent with a deficit in employment statewide.”