Category: Professional Business Services

Professional, Scientific, and Technical Services – Key to Colorado Recovery

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The Professional, Scientific, and Technical Services (PST) sector is critical to the state. Companies in the sector provide engineering and architecture services, conduct scientific research, and manage computer systems. Of particular note, the sector is composed of companies from the various high-tech clusters (photonics, biosciences, nanotechnology, homeland security, IT, etc.).

PST accounted for about 10.6% of state private sector Real GDP in 2010. Between 1997 and 2010 it expanded at an annualized rate of 4.4% versus 3.4% for the Colorado private sector.

Average annual private sector PST Colorado wages for 2010 (most current year available) were $79,623, compared to $47,916 for the overall state average. In 2010, the Colorado PST sector accounted for 9.1% of total private sector employment. Between 1997 and 2010, the sector added employment at an annualized rate of 2.1% compared to 0.7% for the state.

The Healthcare, Higher Education, Tourism, and Extractive industries are leading the recovery. PST is next. It has added about 9,100 jobs since the low point in 2010.The sector has recovered about 78% of the jobs lost since peaking in 2008. If the positive employment trends continue, that level will be reached later this year.

It’s a long slow road to recovery.

For a more complete update on the recovery of the Colorado economy, go to https://cber.co/.

©Copyright 2011 by CBER.

1 in 6 Colorado Jobs are Construction or Construction-Related

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The following is an excerpt from Colorado’s Construction Industry – Impact Beyond the Hammers and Nails  olorado’s construction and related industries employ one-in-six private-sector covered workers, yet almost 60% of the net jobs lost between 2007 and 2009 were in these sectors.

What type of economic activity is necessary to generate enough construction and construction-related activity to recoup these losses, particularly given the state of Colorado’s housing and commercial markets? (Note: this does not suggest that construction is primary or export industry or that is could or should be).

A financial analyst might suggest that the risk or volatility associated with the construction industry could be reduced if Colorado had a larger, more diverse economy. Therein lies the paradox. Because Colorado is a growth state, it is necessary to have a construction industry to support the current base of five million people and build the homes and buildings that would support a larger, more diverse economy. The Colorado State Demography Office projects continued population increases in the range of 1.5% to 2.0% for the extended future. (Population projections can be found on the State Demography Office website ).

Even with the recent reduction in state construction workers, the 2009 location quotient is 1.29, down from 1.44 in 2001. Because the industry is not considered a primary or export industry, at some point the location quotient will eventually revert to 1.0. At that time Colorado will have a concentration of construction workers comparable to most other parts of the country. Keep in mind that this correction will likely include a comparable adjustment in the related industries identified in this study.

Construction is necessary for the expansion and maintenance of the Colorado economy. It is essential that economic development, public, and private leaders understand the relationship between construction employment, its related sectors and the overall economy. That includes awareness of the volatility of the industry and the likelihood that construction employment will ultimately return to a location quotient of 1.0.

©Copyright 2011 by CBER.