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Report: ‘Multiple economic risks’ could impact Colorado economy in 2024 and beyond

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(The Center Square) – A new report on Colorado’s economic outlook that includes a review of more than a dozen industries reveals a complex picture.

The 59th annual Colorado Business Economic Outlook for 2024 was presented by the Business Research Division of the Leeds School of Business at the University of Colorado Boulder.

“Multiple economic risks – with upsides and downside – may impact the economy in 2024 and beyond,” the report said.

Inflation, fading consumer growth, worker shortages and pressure on commercial real estate from people working from home are mentioned as challenges. Student loan debt repayment, artificial intelligence, job sharing, housing and U.S. fiscal policy also are listed as possible obstacles.

The report provides an extensive analysis of population trends.

“Colorado’s population growth has slowed in the short run, with continued slowing births, increased deaths due to both aging and Covid, and slowing migration,” the report said. “International migration historically has contributed to 20% of Colorado’s total net migration, and it slowed significantly in recent years. … Population growth in 2023 is projected to be 50,000, or a 0.9% growth rate, and 60,000 in 2024.”

Colorado’s employment in 2023 foreshadows continuing growth in jobs.

“Employment in Colorado is estimated to have increased 2.2%, or 64,500 jobs, in 2023 once data revisions take effect in March 2024, pushing the economy to new peaks,” the report stated. “Colorado will sustain job growth in 2024 despite a slowing economy, increasing another 41,900 (1.4%).”

The report examined 11 industry groups in the state and seven are projected to add jobs next year. Professional and business services are projected to add the most jobs. Those sectors with decreasing jobs are construction, manufacturing, information and financial activities. Those industries are “navigating the accentuated ill effects of rising interest rates and other economic headwinds.”

Total construction activity projects to be down 12% to $20.9 billion in the state in 2023.

“While high interest rates slowed the single-family housing market, the future remains bright as millennials are in the typical home-buying phase of life, the state has experienced increased migration, and Colorado remains an attractive destination for primary and secondary home options,” the report said. “Multifamily construction will likely decline in 2024, largely because apartment demand will be partially met by the abundance of units already under construction reaching completion. Both nonresidential building and nonbuilding construction are expected to remain steady in 2024.”

The end of the 2020 U.S. Census work led to decreases in government employment in 2022 and is expected to modestly increase in 2023 with jobs in management and administration.

“After two years of declining state government employment, employment expanded in 2022, driven by a rebound in public higher education employment,” the report said. “State employment is expected to steadily increase in 2024, driven by new state programs in the Department of Labor and Employment and Department of Public Health in Environment.”

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