Colorado’s economy will slow next year, but not enough to prevent the state from achieving the fourth-fastest rate of population growth in the nation, according to an economic forecast by the University of Colorado Leeds School of Business.
Colorado’s economy should add 42,300 nonfarm jobs next year, a 1.9 percent increase. That’s above the 1.5 percent job growth expected nationally next year, according to the 2007 Colorado Business Economic Outlook released Monday.
The report estimates Colorado job growth in 2006 at 52,400 jobs, or a 2.3 percent gain for the year.
“We think Colorado will have a much more solid economy than the nation and that will feed migration to the state,” said University of Colorado economist Richard Wobbekind, who supervised the forecast.
He said an entrepreneurial mind-set and quality-of-life factors will help boost Colorado.
Net migration, the number of people moving to the state minus those leaving, should jump from 32,000 this year to 54,000 next year. If that prediction pans out, Colorado will see its biggest gain in population since 2001, when net migration was 81,900.
Only Nevada, Arizona and Utah will have stronger rates of population growth, predicted Patricia Silverstein, president of Development Research Partners in Littleton.
The influx of newcomers competing for jobs will cause the state’s unemployment rate to average 4.8 percent next year, up from 4.5 percent this year.
The competition should also ease the upward pressure on wages. Per-capita personal income in the state is expected to rise to $40,749 in 2007, up from $39,107 this year.
Natural resources and mining will continue to show the fastest growth rate of any job sector next year – 11.1 percent, or 2,300 jobs.
Oil and gas drilling permits in the state are expected to reach a record 5,500 this year and could approach 7,000 next year if petroleum prices hold up.
Three uranium mines, closed in late 2005, are expected to reopen in the Uravan area in western Colorado. Prices for the radioactive metal have skyrocketed from $10 a pound in 2002 to more than $60 in recent trading.
The state’s coal mines have overcome production problems that plagued them this year and should boost production significantly next year.
The most jobs, 13,900, are expected in professional and business services, a broad category that covers everything including administrative assistants, scientists, lawyers and engineers.
The information sector finally is expected to add jobs next year, about 300, although the telecom industry is expected to shed jobs for the sixth year in a row.
Manufacturing is also expected to continue losing jobs next year. Drought conditions, along with higher fuel and fertilizer costs, will continue to squeeze farmers in the state. Cattle producers should benefit from greater exports to Asia.
Homebuilders are expected to continue to cut back next year as the housing industry struggles with a high number of foreclosures and a large inventory of unsold properties.
But a boost in commercial construction and infrastructure projects is expected to allow the construction sector to add 3,000 new jobs next year, down from 7,200 this year.
The Economic Outlook report, like other forecasts, tends to do best when the economy is in a steady growth pattern – the case in recent years.
But it has struggled to capture turning points.
A September forecast from U.S. Bank regional economist Tucker Hart Adams calls for a national recession by the second half of 2007 and 1.4 percent job growth in the state next year.
Xcel Energy economist Tim Sheesley sided more with Adams than the University of Colorado consensus, arguing that a recession remains a possibility next year.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
