Halfway through 2024, Colorado’s economy remains resilient in some areas while exceeding expectations in others, new data finds.
The University of Colorado Boulder released its midyear economic update Thursday which found slight increases in the state’s growth domestic product (GDP), employment and overall population.
“Based on both the quantitative and qualitative information we have received we are optimistic on a continued but slower growth path for Colorado,” said Richard Wobbekind, senior economist and faculty director of the Business Research Division. “The recent GDP numbers show some positive support for our view.”
The review evaluates observed data through 2024 and updates expectations for the remainder of the year. Information is compiled from remarks made by Colorado Business Economic Outlook Estimating Group chairs at a roundtable meeting held in June.
“The national economy is defying expectations in 2024, with GDP, employment, and income outperforming growth expectations set last fall, and inflation is notably improving,” Wobblekind wrote in the report.
Employment
On the national level, the labor market remained strong through the first half of 2024, though not without signs of slowing. The Bureau of Labor Statistics reported the job openings rate increasing slightly to 4.9% from April to May but also showed a year-over-year decline of 1.2 million job openings.
Heading into 2024, the Colorado Business Economic Outlook projected growth of 41,900 jobs, but the revised outlook for Colorado employment growth in 2024 is 49,600.
The highest employment growth is expected in the natural resources/mining, government, education and health service industries.
Concurrently, the information, construction/trade and transportation/utilities industries are expected to decline.
One of the few, but notable, figures trending negatively was the Denver-Aurora-Lakewood Metropolitan Statistical area, which was the only area to experience a year-over-year employment decline at 0.9%
In a statement by the Denver Metro Chamber of Commerce and Denver Metro EDC, they acknowledged the slight cooling in their labor market “partly due to high interest rates that are affecting the entire country” while adding that they do not expect it to persist in the long-term.
“With potential interest rate cuts expected later this year, we believe the current slowdown may be a temporary adjustment rather than an enduring trend,” the statement read.
“Additionally, the Chamber focuses on the broader Metro Denver and Front Range region for its economic development efforts, and we continue to observe ongoing growth in other areas of the state, suggesting broader resilience in the regional economy. The Chamber will continue to monitor the situation closely, but our overall outlook remains optimistic.”
Brian Lewandowski with the Leeds Business Research Division who helped conduct the study shared this optimism, given the positive statewide trends in hiring and employment retention.
He noted that the reported figure is an observed value that is followed by a revision in March and that he “wouldn’t be surprised to see a growth number” by that time.
Colorado’s unemployment rate of 3.8% remains slightly below the national average 4.1%.
GDP
Colorado’s nominal GDP was $539 billion in the first quarter of 2024. When adjusted for inflation, the actual GDP increased at a seasonally adjusted annual rate of 2.3% for the quarter and at 3.3% year-over-year.
The largest gains reported during over the year came from agriculture, forestry, fishing, and hunting industry at 68% followed by mining, quarrying, oil and gas Extraction at 13% and retail trade at 8%.
Lewandowski said this growth was largely due to the volatile nature of the industries themselves reflecting national trends.
“Energy is an industry where we’re seeing a lot of activity right now, for example, which means more job growth,” he said.
Population
According to the State Demography Office, Colorado’s population increased by approximately 36,500 in 2023, reaching a total of 5.8 million by the end of the year. A slowdown in births, a minor decrease in deaths and migration were the factors identified for recent population change.
Although net migration for 2023 was lower than the forecasted 35,000 at only 20,000, it is still expected to increase slightly over the next 5 to 7 years due to the demand for new jobs in the state and a projected 40,000 retirements each year.
Despite recent years of volatility in economic industries nationally, Lewandowski said the state has often performed better than its projections.
“Colorado is outperforming the average state and this is now a long-term trend for us,” he said. “And I would still expect us to continue that going forward.”
The report in its entirety can be viewed here.
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