Colorado’s economy continues to improve, but challenges lie ahead in the second half of the year, particularly for the state’s alternative-energy sector, a senior economist for Wells Fargo said Friday.
Mark Vitner’s comments came as Wells Fargo issued a 15-page report on Colorado’s economic outlook.
The report said the state’s labor market is recovering at a pace slightly ahead of the nation, and a budding housing recovery is driving solid gains in construction payrolls and helping the financial-services industry regain its footing.
But because Colorado is not immune from U.S. and global economic uncertainties and the political climate in Washington, Vitner said Colorado’s economy will probably lose a bit of momentum going into the second half of the year.
Vitner noted that Colorado is a national leader in renewable-energy production. But he said the demand for renewable-energy sources has softened with the global economic slowdown and falling prices.
He noted that Vestas employs about 650 people in Colorado producing wind turbines but that many of these jobs will be at risk if a production-tax credit is not extended.
Producers of solar panels are also coming under pressure because of the glut of inexpensive solar panels hitting the market, primarily from China.
Vitner said the high-tech sector in Colorado is also sputtering.
For the better part of 2011, high-tech employment was growing faster than overall employment in Colorado. But now, not only has job growth in high-tech industries slowed noticeably, but it has also dipped below the growth of overall employment.
Vitner said defense contractors in Colorado are holding back because of pressure on the defense budget.
A bright note, said Vitner, is Colorado’s housing market. The housing market turned around sooner than in many other areas, with home prices in Colorado falling 15 percent from their peak, said Vitner. A 33 percent decline was seen nationwide.
Howard Pankratz: 303-954-1939, hpankratz@denverpost.com or
