"Modest growth" is an apt term to describe the trajectory of Colorado manufacturing the past several years, one that continues to accurately describe the sector’s performance year-to-date in 2018.
Economic data released the past 30 days or so also speaks to more volatility creeping into the sector as the impact of tariffs threatens Colorado exports, thus far a bright spot in 2018 reporting.
With the help of Gary Horvath, primary content provider for Colorado Business and Research (cber.co) and the crack staff at the University of Colorado's Leeds School of Business including Brian Lewandowski and Jackson Reuter, here are some key data points and takeaways.
New data for the Colorado sector points to:
Modest job growth compared with other sectors
Colorado will add 51,400 to 57,400 jobs in 2018, a growth rate of 1.9 to 2.1 percent annually. The "volatile growth category" -- including manufacturing -- will add 15,900 to 17,900 jobs in 2018, an increase of 2.1 to 2.3 percent.
The manufacturing sector is on track to add 2,400 jobs in 2018, an increase of 1.6 percent, a "weak rate of growth" per cber.co.
Projected Job Changes All Sectors - 2018 Forecast
Colorado Wage and Salary Employment 2018 Forecast:
Total exports are up 11 pecent year-over-year through May ($3.6 billion year-to-date May 2018 vs. $3.3 billion May 2017, with total exports in 2017 $8.05 billion.) Several of the top 15 manufacturing export categories year-to-date (by revenue) may be impacted by reciprocal tariffs in the second half of 2018:
Productivity gains across economic sectors including manufacturing have stalled. It's officially a trend, one that has economists flummoxed.
Horvath of cber.co cited its duration, noting, "With the exception of spikes in 2002, 2003, and 2009/2010, labor productivity has trended downward since 2000. In has been in the range of -0.5 percent to 1.9 percent since 2011," while at the same time speculating about the root causes:
"The decline in productivity has been a result of weak to modest investment, catering to special interest groups -- which has decreased efficiencies, impact of new technology, and a slowdown in the rate of the development and utilization of technology."
It's as cogent an explanation as any. Other anecdotes point to the implementation gap between large organizations and the small to medium-sized companies that comprise the majority of the sector.
Bart Taylor is publisher of CompanyWeek. Contact him at email@example.com.