The economy is fragile and there are a number of variables that could alter any forecast. At the risk of sounding like a broken record, 2012 will look a lot like 2011. Colorado will experience below average growth for another year. Cber.co is projecting that we will see real GDP growth of 2.1% to 2.5% in 2012, with employment growth of 27,500 to 37,500 in Colorado. Go to Cber.co for the 2012 Colorado Economic Forecast.
The sectors of the economy can be evaluated in three groups: solid growth, limited growth, and volatile growth. A summary of these analyses for each of the groups follows.
Solid Growth Sectors (About 41% of total employment)
These sectors posted stronger growth in 2011 than any time in the past two decades. Growth will taper off slightly 2012 with the addition of at least 1,500 jobs in each of the following sectors.
Tourism
Private Education and Health Care
Professional and Scientific
Extractive Industries
Wholesale Trade
Employment Services
Higher Education
In total, these sectors will add 26,500 to 32,500 net jobs in 2012.
Limited Growth Sectors (about 26% of total employment)
In 2011 these sectors individually recorded minimal change in their number of employees. Significant change is unlikely in a slow economy.
Personal (Other) Services
Utilities
Retail Trade
Corporate Headquarters (MCE)
State (Not Higher Education)
Manufacturing
Transportation & Warehousing
Combined, these sectors will add 3,000 to 9,000 net jobs.
Volatile Growth Sectors (33% of total employment)
These sectors have either bottomed out, are near the bottom, or have turned the corner. Combined they will shed fewer jobs than in 2011.
Construction
Financial Activities
Information
Federal Government
B-to-B (Not Employment Services)
Local Government (Not K-12)
K-12 Education
Combined, there will be a change of -6,000 to 0 net jobs.
2012 Employment Outlook
Because the economy is still not on a solid foundation, it is reasonable to provide three scenarios for the summation of the above groups: optimistic, most likely, and pessimistic.
Optimistic Scenario
U.S. Real GDP 2.6%+
More than 37,500 Colorado Workers or More
Most Likely Scenario
U.S. Real GDP 2.1 % to 2.5%
+ 27,500 to 37,500 Colorado Workers
Pessimistic Scenario
U.S. Real GDP 1.6% to 2.0%
Less that 27,500 Colorado Workers
If probabilities were to be assigned to each of these scenarios, they would be as follows:
Most Likely 55%
Pessimistic 25%
Optimistic 20%.
At the time the forecast for 2012 was prepared, there was slightly more downside risk.
To access the Cber.co 2012 Colorado Economic Forecast click here.
©Copyright 2011 by CBER.