Colorado’s economic momentum is expected to continue into 2022 as the state continues to rebound from the pandemic and emerges from a surge in Omicron cases, according to a report released today by the University of Colorado Boulder and Colorado Secretary of State Jena Griswold.
The Quarterly Business and Economic Indicators report is prepared by the Leeds Business Research Division (BRD) at CU Boulder in conjunction with the Colorado Secretary of State’s Office. The latest report for the fourth quarter of 2021 shows that Colorado added 152,000 jobs between December 2020 and December 2021 (5.8% growth), and the state’s unemployment rate improved to 4.8%.
New business filings increased year-over-year, but decreased seasonally in the fourth quarter, notching 35,625 new business filings (a 6.8% decline). Business renewals increased slightly (2.6%) in Q4, with 166,435 filings.
“A new year always provides opportunities for renewed hope, and despite the extraordinary and unprecedented challenges our state has faced, today’s Quarterly Economic Indicators Report provides some much-needed optimism as we begin 2022. Colorado is ranked above average for GDP, employment, and income growth; and new entity filings and existing entity renewals hit record levels in 2021,” said Secretary Griswold.
“Colorado’s economy is on the cusp of returning to pre-pandemic levels in a lot of areas, but we have to keep working to make sure that momentum continues for the weeks, months, and years ahead.”
The report also notes the decreased traffic to retail, recreation, and restaurant establishments, according to the Google Mobility Reports, as the Omicron variant weighed on some industries over the last quarter.
Inflation remains a concern
The national consumer price index (CPI) increased 7.1% year-over-year in December 2021, the highest monthly increase since June 1982. Annually, national inflation rose 4.7% in 2021, while prices in the Denver-Aurora-Lakewood region rose 3.5%.
“Inflation continues to be a topic of concern for many businesses across the state,” said Rich Wobbekind, senior economist and faculty director of the Leeds Business Research Division. “But the trend isn’t exclusive to Colorado. In fact, 2021 was the first time in nine years that Denver’s inflation rate was lower than the nation.”
Home price growth in the state also continues to increase, up 20.8% year-over-year in the third quarter of 2021. That pace is the 14th-fastest in the country. Weekly wages in Colorado increased an average of 5.7% in December, ranking the state 19th. Average weekly wages increased 4.5% in all of 2021 in the state. Colorado’s labor force participation rate was 68.3% in December, ranked 4th nationally, but the state’s 4.8% unemployment rate ranks 34th.
Business leaders are optimistic about full recovery in 2022, as noted by the business confidence index of 58 ahead of Q1 2022 (50 is neutral). Still, some industries—including leisure and hospitality and mining and logging—continue to record jobs deficits and may continue to face challenges in 2022.