Tag: Colorado economy

Most Colorado Firms have Fewer than Twenty Workers

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2012 Q3 data from the Bureau of Labor Statistics shows that Colorado has about 171,000 private sector firms.  Only 238 of those firms, or 0.1%, have 500 or more workers.  There are just under 19,000 firms, or 11.0%, with 20 to 499 workers. The majority of firms have fewer than 20 workers. Almost 152,000 firms, or 89%, are in this category.

About 1.9 million workers are employed at these private sector firms. About 238,000 workers, or 12.5%, are employed at these firms. Almost 1.1 million workers, or about 58%, are employed at firms with 20 to 499 workers. Finally, the firms with fewer than 20 workers employ about 572,000.

While the bulk of Colorado’s firms are small (<20), the majority of workers are employed at firms with 20 to 299 workers.

Note:  A similar comparison for the number of firms and total wages can be found by clicking here.

©Copyright 2011 by CBER.

Colorado Manufacturing Wages Higher than State Average

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Manufacturing is a source of primary jobs, or jobs that create other jobs, for about 130,000 Coloradans. As well, some manufacturing jobs pay higher than average wages.

In 2011, the year that data is most currently available, the average annual wages per three-digit NAICS manufacturing sector was $61,668 (Colorado). By contrast, the average for the state was $49,245.

Of the 21 sectors, 5 have average annual wages above the Manufacturing average:

  • NAICS 324 (nondurable goods) Petroleum $106,413.
  • NAICS 334 (durable goods) Computers $94,452
  • NAICS 336 (durable goods) Transportation equipment $91,340
  • NAICS 325 (nondurable goods) Chemicals $75,217
  • NAICS 312 (nondurable goods) Beverage $62,099

The following two sectors have wages similar to the Manufacturing average:

  • NAICS 333 (durable goods) Machinery  $61,252
  • NAICS 335 (durable goods) Electrical equipment  $61,257

Of the 21 sectors, 14 have average annual wages below the sector average.

Overall, Colorado average manufacturing wages are higher than the state average.

For additional information on the state’s manufacturing sector check out Colorado Manufacturing Update Analysis of Employment Data Through 2012. It is available in the Special Reports section at https://cber.co.

©Copyright 2011 by CBER.

Colorado’s Dwindling Concentration of Manufacturers a Concern for the State

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Manufacturing is a critical part of Colorado’s economy.  Between 1998 and 2010 manufacturing employment decreased significantly in the state and the nation. Despite a slight rebound in jobs, Colorado’s concentration, or location quotient (LQ), of manufacturing workers has not bounced back.

A LQ is the local concentration of workers in a particular sector relative to the concentration in another area (typically the other area is the United States). If the local concentration is the same as the national concentration, the LQ=1.

The Colorado LQ for manufacturing is .645.

In December 2012:

  • 5.72% of Colorado employment was manufacturing
  • 8.87% of U.S. employment was manufacturing.
  • 5.72% / 8.87% = .645

Colorado has a lower concentration of manufacturing that the U.S. In short, this is important because many manufacturing jobs have higher than average pay. As well, segments of the manufacturing industry are critical components of the state’s high tech cluster.

For additional information on the state’s manufacturing sector check out Colorado Manufacturing Update Analysis of Employment Data Through 2012. It is available in the Special Reports section at https://cber.co.

©Copyright 2011 by CBER.

Colorado Adds 62,600 Jobs in Q1 2013

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A review of 22 NAICS sectors shows that on average, Colorado added 62,600 jobs in Q1 compared to the same period last year.  Only four of the sectors posted losses (Information 1,800; Federal Government 900; Natural Resources 600; and State (Not Higher Education) 100.

The following sectors added jobs at a faster level, Q1 2013 vs. 2012:
Accommodations and Food Services; B-to-B (Not Employment); Retail Trade;  Construction;  K-12 Education;  Wholesale Trade; Health Care; Arts Entertainment, and Recreation; and Other Services.

The following sectors added jobs at the same level, Q1 2013 vs. 2012:
Corporate Headquarters (MCE), Local (Not Higher Education), and State (Not Higher Education).

The following sectors added jobs at a slower level, Q1 2013 vs. 2012:
Private Education; Information; Employment Services; Transportation, Warehousing, and Utilities;  Higher Education; Financial Activities; Federal Government; Manufacturing; Professional, Scientific, and Technical; and Natural Resources and Mining.

While it is great news that most sectors are adding jobs, it may be cause for concern that many of the state’s primary job creators have fallen in the latter category – adding jobs at a level slower than 2012.

©Copyright 2011 by CBER.

2012 CDLE Monthly Employment Numbers Didn’t Reflect Reality

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In 2012, the monthly Colorado Department of Labor and Employment (CDLE ) employment press releases told a story about the economy that did not agree with what happened on the streets.  The initial seasonally adjusted employment data depicted huge swings in employment, ranging from an unbelievable gain of 19,500 jobs in January to an equally absurd loss of 6,900 jobs in June.  This is a range of 26,500 jobs.

The initial data showed losses in two months and no growth in a third. The initial data indicated that job gains only occurred in nine months.

The benchmarked revision, released in March 2013, told a much different story. There were consistent job gains in all 12 months, rather than the erratic job growth portrayed by the initial data.  That range of job growth was 7,300 jobs, from a low of 1,700 jobs added in May to a peak of 9,000 jobs added in October.

The correlation coefficient between the initial data and the March benchmark data is .56. The coefficient of determination is .31. In other words, the relationship between the two sets of data is weak. It is difficult to understand why the initial data set does such a poor job projecting employment growth.

It is important for public and private leaders to have “accurate” data available to make critical business decisions relating to their industry. In this case, it was difficult for consumers to have confidence in the business climate when the story being told by state officials did not reflect what was actually happening on the street. CDLE must revisit its priorities. Publishing credible data is much more important than conducting a media blitz for the sake of gaining exposure for the agency.

©Copyright 2011 by CBER.

CDLE’s Monthly Unemployment Data Misses the Mark in 2012

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Last year, did it  seem like the Colorado unemployment rate didn’t match what was happening on the streets?

For the most part, the initial data, which is used in the monthly CDLE media blitz, told a much different story from the unheralded benchmark revisions released in March. In fact, the correlation coefficient between the initial release data and the March benchmark data is .44. This means there is a relationship between the two data sets, but it is not strong.

The initial data indicated that unemployment rate was flat at 7.8% for the first quarter, had four months of increases up to 8.3%, then five months of declines.

On the other hand, the benchmarked revisions started at 8.3% and dropped in February to 8.2%. The rate stayed at that level until June, when it declined for the last 6 months of the year.  The benchmarked data ended the year at 7.5% compared to 7.6% for the initial data.

Good data is most valuable during times when the economy is the most volatile. The unemployment rate published by the Colorado Department of Labor failed to meet that critical need in 2012.


©Copyright 2011 by CBER.

How Would You Describe Colorado’s 2010 Job Growth of 2.3%?

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The world would be a much better place if economists were not allowed to use thesauruses. Only economists use phrases and terms such as irrational exuberance, the new normal, conundrum, albeit, and exacerbated.  Even worse are their descriptors for the performance of the economy.

Some economists refer to job growth of 2.3% as encouraging, on the upswing, or comparatively modest. Others might describe that same level of growth as dismal, subpar, or in line with expectations.

The state added 51,800 jobs in 2012. In the 73 years that employment data has been recorded for Colorado, 2012 was the 18th best year in terms of absolute job growth.

If you talked to a group of sixth graders, instead of an economist, they would probably smile and give such a performance an enthusiastic thumbs-up.

The 2012 job growth can also be measured in relative terms. In other words, state employment increased by 2.3%. In the 73 years that employment data has been recorded for Colorado, 2012 was the 46th best year of relative growth.

A group of sixth graders would describe that level of growth as follows, “If I did that poorly on a test I would flunk. That sucks!”

It’s your call, how would you rate the 2012 job growth in Colorado? Would you use the verbiage of an economist or the wisdom of a sixth grader?

For more information about the performance of the Colorado economy in 2012 refer to “Review of Colorado Economy – 2012“.

©Copyright 2011 by CBER.

Decline in Employment of Information Sector Accompanied by Decline in Concentration of Workers

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One of Colorado’s more intriguing components of the state economy is the Information sector.  It includes telecommunication, printed media, broadcasting, Internet service providers, and software publishers.  As such many companies in this sector are part of Colorado’s advanced technology cluster.

Over the past decade technological advances and the Internet caused a decline in jobs in the media, particularly the printed media. As well consolidation occurred in telecommunications, the most recent being the acquisition of Qwest by Centurylink.

After peaking at 108,400 workers in 2000, the sector has declined steadily. In 2012, it had fallen to 69,700, about the same level as in the mid-1990s.

Over this period, technological advances and consolidation caused the sector to decline across the U.S. Unfortunately, the location quotient, or the concentration of local Information workers relative to the U.S. has dropped off at a faster rate in Colorado than the U.S.

In August 2000, Colorado’s location quotient for Information peaked at 1.84. By the end of 2012 it had fallen to 1.48.

The good news is the state still has a high location quotient of workers and the sector remains a major contributor to the Colorado Gross Domestic Product.

For additional information about the performanc of the Colorado economy refer to “Colorado Employment Review – 2012 “.

©Copyright 2011 by CBER.

Colorado Adds 51,800 Jobs in 2012 – Top Growth in Low Paying Sectors

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Colorado received good news today (3/18) when the Bureau of Labor Statistics released its benchmark revisions for 2012 employment. Overall 51,800 jobs were added, well above the 40,000 mark that the BLS reported in December 2012.

Growth was led by Accommodations and Food Services (AFS); Health Care; Professional, Scientific, and Technical Services (PST); B-to-B Services (Administrative and Waste Services), Employment Services, and Retail Trade.

The best news is that the PST sector added workers. This sector has many companies that are a critical part of the state’s advanced technologies cluster.  Overall, this sector has many occupations that pay above the state average.

The growth of the B-to-B Services and Employment Services are indicators of an improvement in the business sector.  Expansion in AFS, Retail, and Other Services sectors are an indication that consumer spending has improved. Unfortunately, each of these sectors have annual wages below the state average.

Only four sectors lost jobs. Three of the four were governmental sectors.

For additional details, see the “Review of the Colorado Economy – 2012”

Copyright 2011 by CBER.

Slow Gross Job Growth – a Cause of the Weak Recovery in Colorado

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Colorado prides itself on its entrepreneurial spirit, yet, it took about 4 1/2 years to recover from the 2001 recession and it will take longer to rebound from the Great Recession.  In short, the primary reason the state experienced net job growth was a decline in gross job losses and weak gross job gains.

The Bureau of Labor Statistics produces the Business Employment Dynamics data (BDM), a data set that provides gross job added because of expansion and openings and gross jobs lost because of contractions and closures. This differs from the wage and salary data series that reports only total net jobs.

The data shows that since 2000, Gross Job Gains and Gross Job Losses have been volatile and both have trended downward.

Since 1993, between 18.1% and 24.7% of the Gross Jobs Added are from openings while between 75.3% and 81.9% are from expansions. For that same period, the range of Gross Job Lost from contractions is 77.0% to 86.4% and the range for closings has been 13.6% to 23.0%. In the short-term, Gross Losses are moving downward and Gross Additions are headed upwards.

For more information go to the report, “Why Weaker Job Growth?” on cber.co. It can be found in the Special Reports Section.

 

©Copyright 2011 by CBER.