Northern Colorado will feel the punch of a deepening national recession, with regional job totals expected to remain relatively unchanged in 2009, according a revised forecast issued by Colorado State University economists.
Reflecting low consumer confidence in the wake of a "staggering" amount of national layoffs since October, Colorado State Professor Martin Shields and his colleague David Keyser issued revised employment forecasts today that project regional job totals will only grow 0.1 percent by year’s end, translating into about 230 new jobs in Larimer and Weld counties. Shields presented the information at the Northern Colorado Business Report’s Economic Forecast event in Greeley.
The updated projection, which is sponsored by the Northern Colorado Economic Development Corp., or NCEDC, is down from the 1.9 percent increase initially forecast in October. Last year, the region added about 3,500 jobs, almost exactly what the two economists predicted in April.
"While we knew the national recession would affect northern Colorado, our earlier numbers did not anticipate the sheer magnitude of the problems that have emerged over an incredibly short time," Shields said. "If there’s a bright side, it’s that the region is doing significantly better than most other places."
Recent increases in unemployment have caught the economists’ attention. Over the past year, the number of people out of work in the two counties has swelled to more than 15,700, nearly 4,450 more than a year ago.
"Employment growth in health care will continue," said Keyser, adding that the natural resources and mining industry also remains a bright spot. Performance in the manufacturing sector will be uneven, with small but widespread job losses at individual companies offset by new opportunities provided by such clean energy businesses as Vestas, AVA Solar and Woodward Governor.
"We expect companies across the spectrum to delay hiring given current uncertainty, and we’ve already seen projects delayed due to the current economic climate," Keyser said. This differs from the recession in 2003 when one industry – high-tech manufacturing – made large workforce reductions that had a ripple effect across the economy.
"Our diverse economic base combined with the region’s non-participation in the national housing boom has helped ease the pain," Shields said. He noted with optimism that the "political winds nationally seem to be blowing in the direction of a stimulus package promoting industries, such as clean energy, that are real strengths in this area and Colorado."
While dealing with the pressing issues of the downturn, Maury Dobbie, president and CEO of NCEDC, stressed the importance of preparing northern Colorado to move quickly when the recession ends. "Working with our partners, NCEDC is dedicated to helping businesses put people to work immediately. But the economy will eventually turn around, and we are similarly committed to making sure that we are positioned to lead the state and the nation back to prosperity."
Dobbie indicated helping existing companies will remain a top NCEDC priority. In addition, she indicated the organization will be "tenacious in efforts to attract suitable companies."
Dobbie cited the Northern Colorado Workforce Initiative as a key strategic component in helping the region build a world-class workforce that enhances the capabilities of the existing businesses and draws new employers into the region. Beyond education efforts, Dobbie stressed the importance of infrastructure investments in helping lay the framework for the recovery.
Shields similarly cautioned against government solutions that ignore the long-term. "I know the argument to do something immediately is compelling, but a stimulus package that fails to make adequate investments in future economic prosperity is incredibly short-sighted."
NCEDC and the Colorado State University Office of Economic Development jointly fund the regional economist position held by Shields.