The Colorado economy continues to grow in 2013 at a rate that exceeds previous expectations going into the year, says economist Richard Wobbekind of the University of Colorado Boulder’s Leeds School of Business.

Midway through the year, Colorado’s job growth rate is up by about 2.3%, a gain of about 52,400 jobs from May 2012 to May 2013. Job growth is expected to continue to rise to about 2.5%, a figure revised from estimates last December when the projection was about 1.8%.

“The performance of the Colorado economy has modestly exceeded our December 2012 forecast,” says Wobbekind, executive director of the Business Research Division and senior associate dean for academic programs at the Leeds School. “Obviously, we are pleased with the higher level of job growth and hopeful it will continue throughout the remainder of 2013.”

Every industry except natural resources and mining, information and financial activities is registering year-over-year employment growth. Sectors seeing the largest growth include construction, professional and business services and leisure and hospitality, Wobbekind says.
Wobbekind, who presents the Colorado Business Economic Outlook forecast each December, recently met for a midyear update with steering committee members who represent the state’s major economic sectors.

The value of single-family residential construction is up nearly 41% and multifamily construction has climbed more than 72% through May 2013, he says. Nonresidential building activity is steady, surprisingly being driven by construction of medical facilities and office buildings.

Construction in college and government buildings and rehabilitation of retail and industrial structures is slow. Infrastructure, including work on the new DIA rail line and major projects on I-225 and U.S. 36, is healthy, helping to lead Colorado’s recovery.
On the downside, a lack of precipitation and expected shortages of irrigation water remain a concern for Colorado’s farmers.

While topsoil is generally adequate on approximately one-third of crop acres, subsoil moisture is adequate on only about 20% of acres. Pasture and range conditions indicate that nearly 60% of acres are in poor to very poor condition and crop yields across the state vary from average to total losses. Also, cattle and calves inventory is down by about 7% from last year.

“We had anticipated an extremely strong year for Colorado agriculture,” says Wobbekind. “Unfortunately, the lack of precipitation in a timely fashion will significantly impact this year’s production. Still, agriculture remains an extremely important part of the Colorado economy.”

Within the professional and business services sector, which rose by 4.4% in 2012, the professional, scientific and technical services subcategory experienced 3.4% growth and accounts for slightly more than half of the sector’s employment. Colorado remains a hub of activity in industries that require high-skilled labor, such as aerospace and clean energy, as well as consulting and legal services, according to Wobbekind.

A year-over-year increase in employment by 3.8%, or 10,500 jobs, was experienced in the leisure and hospitality sector year-to-date through May 2013. The hike comes after the best tourism year ever in Denver in 2012— propelling an eight-year trend—with record numbers of visitors, visitor spending and lodgers’ tax collection.

Colorado has the fifth-busiest airport in the nation, and Denver is a destination for large-group meetings and conferences, accommodating up to 19,000 attendees. Colorado’s ski industry was buoyed last year by increased snowfall late in the season, allowing some resorts to extend their 2012-13 season and offsetting the unusually warm fall that led to slow early-season sales and visits.