Colorado’s construction industry has struggled for more than a decade!
Between 2007 and 2009 the construction and related industries accounted for the loss of 1-in-6 private sector jobs. Many believe that construction began its tumble in the middle of the decade. Employment and total valuation peaked in 2006 at 167,800 and $16.8 billion respectfully.
A closer look at Real GDP data shows that the downturn in Colorado’s construction sector actually began in 2000 and has been on a steep downhill path since. At that time the construction industry’s contribution to state output was $15.5 billion, or about 9% of the state’s private sector Real GDP (in 2005 chained dollars). Last year that contribution had dropped to $8.2 billion or about 4% of the private sector output total. From 1997 to 2010 the sector posted an annualized decline of 2.8%.
This decline in output is relevant for two reasons. First, the construction industry affects all of Colorado. More than half of the state’s counties have a higher than average concentration of construction workers. Second, a case can be made that the industry hasn’t bottomed out yet.
Unfortunately, about the only viable solution is time.
©Copyright 2011 by CBER.