CU economists see job losses in 2009 for Colorado
December 8, 2008
DENVER ” Job seekers, take note. You might have more company soon.
University of Colorado economists expect the state unemployment rate to rise to 6.5 percent next year as the state joins the rest of the U.S. in a recession.
The rate was 5.7 percent in October.
A forecast released Monday by CU-Boulder’s Leeds School of Business predicts Colorado will lose jobs in 2009 for just the seventh time since annual records have been kept since 1939. Economist Richard Wobbekind of CU said he expects 4,000 job losses next year.
As of November, the Office of State Planning and Budgeting was predicting a 5 percent unemployment rate for 2009. The office is expected to issue its latest quarterly revenue and economic forecast later this month.
The CU team said businesses and customers spooked by the national recession; the credit and housing crises; and stock market instability all point to a gloomy forecast for 2009.
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CU economists expect many industries to shed jobs next year, led by 11,200 job losses in the construction industry.
While more job losses are expected in manufacturing, Wobbekind said the employment level appears to be stabilizing. “Overall the area probably won’t fall much further, and we are also hearing more companies saying they are pulling back manufacturing to the U.S. where the transportation costs are less significant,” Wobbekind said.
The CU forecast expects the natural resources and mining, education and health services, and government sectors to weather the recession the best. Private businesses and the professional and business services sector also should see gains, but retail, the information sector, finance and insurance, and real estate are expected to cut jobs, according to the forecast.
Government will add about 4,400 jobs, mostly in local education, as Colorado adds an estimated 98,100 residents in 2009, the forecast said. The short-handed educational services and health services sector should continue to grow during the downturn, as it has every year in the last decade, with about 7,000 new jobs.
The energy sector will grow but at a slower rate as global demand slows. Meanwhile, higher costs for feed, fuel, fertilizer, seed and land will keep the agriculture industry from making gains in 2009.
It should be a slower year for tourism and the leisure and hospitality industry, although lower fuel prices should encourage more people to visit state and national parks. Good snow could help the ski industry though, and voters in casino towns may choose to raise betting limits, which could boost gambling tax revenue, the CU team said.
In agriculture, net income is expected to dip slightly next year due to surging feed, fuel, fertilizer, seed and land costs.
Exports are expected to dip 3 percent next year after rising about 5 percent this year. The increase was driven in part by a weak dollar that made U.S. goods more attractive and the reopening of beef markets, among other factors.
Gov. Bill Ritter said Monday that while Colorado is not immune to global economic problems, the state is doing better than many others because of its diverse economy, well-educated work force and strong sectors such as energy and aerospace.
“But we must be even more aggressive in our pursuit of business-development, investment and job-creation opportunities,” he said in a statement. “We must continue to play to our strengths and stay focused on 21st-century, knowledge-based growth sectors like the New Energy Economy, biosciences, technology and aerospace ” and other Colorado mainstays like tourism ” to help get Colorado’s economy moving again.”
Ritter added he has initiated a number of steps to address the state’s economic troubles, including:
– Working with President-elect Obama and his transition team on the plan to make economic recovery and stimulus investments in transportation and energy infrastructure projects.
– Launching a series of statewide, small-business finance forums starting this week in Pueblo.
– Embarking on economic-development missions to Spain, Japan and China this year to promote Colorado’s New Energy Economy, bioscience and air travel sectors.
– Proposing a $12 million job creation, job training and business-assistance legislative package.
– Bolstering efforts to connect job seekers with employment opportunities online and through job fairs and open houses.