Cautious optimism is the appropriate reaction to a University of Colorado forecast of 52,100 new jobs in the state next year, continuing this year’s gains and lifting the state further out of the pit of the 2001 recession.
The 2006 Colorado Business Outlook, released Monday by CU’s Leeds School of Business, says the state is on track to add 49,000 non-farm jobs for 2005, a 2.2 percent growth rate – higher than the 1.7 percent national pace. Next year, jobs are predicted to grow another 2.3 percent, versus a national rate of 1.8 percent.
One should note, however, that if all those new jobs materialize in 2006, that will bring Colorado back up to 2.25 million workers – the same as before the recession.
The unemployment rate next year is predicted at 4.9 percent, versus 5 percent nationally.
Not that we’re complaining – an improving economy beats the alternative. Last week, the U.S. Commerce Department reported gross domestic product grew 4.3 percent from July through September, despite the devastating Gulf Coast hurricanes. On Tuesday, the government reported U.S. factories posted a 2.2 percent increase for manufactured goods in October, offsetting September’s 1.4 percent drop. Also, productivity of American workers increased by 4.7 percent in the quarter, the best showing in two years.
The Colorado forecast calls for the professional and business services sector to produce the largest share of new jobs; rapid job growth in natural resources and mining will slow by about a third, and job losses in the information sector will continue. Construction is likely to add another 9,500 jobs next year, even though home-building permits have slowed.
“It’s not a booming economy,” Denver economist Tucker Hart Adams said in assessing the report. “But it’s an economy. They’re real optimistic about real estate and the construction industry, but with (interest) rates moving up and people heavily in debt, I would be surprised if that part of the economy is that strong.” Also, Adams said, job growth isn’t robust either locally or nationally but is “kind of meandering along.” Lack of income growth nationally also remains a concern.
The forecast is an overall view: Prosperity still eludes parts of rural Colorado, including the Eastern Plains and the San Luis Valley.
We note that the outlook included a warning about factors that caused uneasiness this year, including the war in Iraq and energy prices. Those will be wildcards again in 2006, so we’ll keep our fingers crossed.
