The Leeds School of Business released its 47th annual business forecast, calling for the U.S. economy to grow at a faster rate and a modest slowdown in the growth rate of the state economy in 2012. The report projected a sharp increase in U.S. Real GDP growth, from 1.8% to 2.4%. Surprisingly that gain translates into an increase of only 23,000 workers in Colorado. This follows on the heels of job gains of 27,500 in 2011.
Job losses are projected for the Manufacturing, Information, and Financial Activities sector. After manufacturing gains in 2011, it is disappointing to see the projected return to negative growth. Evidently renewable energy, which sparked manufacturing growth in 2011, will either flatten or taper off in 2012. Consolidation in the other two sectors will drive further cutbacks.
According to the Leeds School, 2012 growth will be driven by the Health Care and Professional Business Services sectors. Smaller gains will occur in tourism and construction. It is encouraging to see the Construction sector on the positive side of the ledger again.
Although, the 2011 preliminary employment estimates will not be updated until March 2013; the Leeds estimate of 27,500 additional jobs is reasonable. In evaluating their projections for 2012, it is interesting to see how they fared with their 2011 forecast.
1. The Forum (UCCS) error -2,500
25,000 jobs (10/2/2010).
2. OSPB error -3,200
24,300 jobs (12/2010).
3. BBVA Compass error -5,500
22,000 jobs
4. (tie). Legislative Council error -7,500
19,900 jobs (12/2010).
4. (tie). BBER error -7,500
(15,000 to 24,999) (10/2010).
4. (tie) Jeff Thredgold’s Small Business Index error +7,500
(33,000+) (Autumn 2010).
7. CSU Economics Class error – 8,500
19,000 jobs (11/16/2010).
8. CU Colorado BEOF error -17,400
10,100 jobs (12/6/2010).
9. Demographer’s Office error -27,500
No growth (11/5/2010).
10. Moody’s/Dismal.com error +28,500
56,000 jobs (3/2011).
Like most forecasts, the Leeds projections have historically understated periods of growth and decline. If the Leeds pattern of error continues in 2012, then job gains above 30,000 might be more realistic. For additional information on forecast accuracy click here.
©Copyright 2011 by CBER.