The news was generally positive this past Monday at the University of Colorado's 51st annual Business Economic Outlook program, hosted by the Leeds School of Business. Richard Wobbekind, senior associate dean for academic programs, again emceed what has become the most important and substantive forecasting event for Colorado's economy.
As the report surmised:
"The state is measurably outperforming due to the talented workforce, key infrastructure for entrepreneurship, diverse industries, and the aggressive efforts by state and local economic development."
Last year, the state ranked fifth nationally in real GDP growth; the pace of employment growth ranked third; personal income growth, seventh. Further:
"Real GDP increased 4.7 percent year-over-year compared to 2.4 percent nationally. Per capita income rose 4.5 percent compared to 3.6 percent nationally."
All signs point to another strong year ahead. Voices on a national level questioning the strength of the U.S. economy haven't paid attention to what's happening in Colorado.
Among concerns, Wobbekind mentioned two with emphasis: a growing lack of skilled labor that could stall business development; and housing prices. Generally, Wobbekind and co-presenter Kelly Brough of the Denver Metro Chamber set a balanced tone in celebrating success while forecasting that in 2016 growth will slow slightly as Colorado reaches full employment, interest rates rise, and systemic challenges in workforce and affordable housing take a larger toll.
The news from Leeds was mixed for manufacturing. Recent ISM data that point to a contracting national manufacturing sector dampened Wobbekind's comments, though employment in Colorado's sector is forecast to continue to expand if at a slightly lower rate. Year-over-year employment grew around 3 percent from '14-15 to just over 140,000 total jobs, and 2016 is forecast to add another 2,500 jobs.
"...a stark takeaway from the Leeds report is that very little about the sector is viewed as resurgent or transformative."
The data indicate positive changes in Colorado's manufacturing sector that should translate into faster growth. There's a discernible shift from durable goods in volatile sectors like computers and electronics to nondurable like food and beverage, reflecting the strength of home-grown industry more inured to international uncertainty including the strength of the dollar, or energy cycles.
At the same time, manufacturing advocates may be disappointed that one, the report doesn't make a meaningful connection between the goods-producing sector and growth in trade, transportation, and utilities, the state's leading workforce sector with over 450,000 employees; and, lacks references to Colorado's high-growth maker industries as drivers of future economic growth.
For example the report makes little mention of Colorado's natural and organic food sector and forecasts food manufacturing to add 500 jobs in 2016, to just over 21,000 total. It’s a conservative estimate. Colorado’s high-energy sector is churning out start-ups, attracting talent and capital and has become a magnet for established companies who want to be here to be part of the ‘revolution’ in the food business.
Moreover, a thriving ecosystem of professional services and trade jobs are being created to support manufacturing – upstream and down – from the development of raw materials to management and sales, marketing and finance, real estate, logistics, wholesale and retail trade. A significant bump in Professional, Scientific and Technical Services jobs forecast by the Outlook is certainly tied to growth in manufacturing; how much is unclear. But manufacturing's multiplier effect is powerful, both in attracting supply-chain companies to support industry and creating second- and- third jobs.
Add the supply chain to the conversation and everything changes. Until that happens, a stark takeaway from the Leeds report is that very little about the sector is viewed as resurgent or transformative. Colorado manufacturers are on a winning streak (read today about Vestas Towers); growth is steady and evolving in ways that might profoundly change the economy. Advocates like CompanyWeek can do more to communicate the value of manufacturing, including how one manufacturing job drives employment gains in the state's service and trade sectors.
Time to redouble our efforts. And believe that 2016 is the year we'll make a bigger difference.
Bart Taylor is publisher of CompanyWeek. Reach him at email@example.com.