It’s almost all good news for Colorado Springs in the state economic outlook released last month.
According to the 2018 Colorado Business Economic Outlook, the city is seeing a better standard of living thanks to increased productivity; El Paso County added more than 10,100 jobs in the past year; and the Springs is expected to outperform the nation in wage increases and employment.
“That should continue in 2018, making the region a smart choice for business growth and new investment,” according to the report.
The 140-page report, from the Business Research Division at CU Boulder’s Leeds School of Business, includes forecasts and trends for 13 key business sectors across the state. It was presented Dec. 11 at the 53rd annual Colorado Business Economic Outlook Forum in Denver.
A big takeaway for Colorado Springs: The city no longer lags behind Denver and Boulder.
“[Colorado Springs] has actually been growing faster than Boulder and Denver over the last couple of years, and I think the latest revisions … are going to show even an upward revision beyond what we have,” said Rich Wobbekind, executive director of the Business Research Division, citing bounce-back in the nonprofit sector as well as aerospace and defense, along with a pick up in retail, tourism and hospitality, and growth at Colorado Springs universities.
The “spillover effects” of people commuting to south Denver and Castle Rock have helped Colorado Springs’ expansion, Wobbekind said, and the city enjoys a blend of a “relatively low cost of living compared with other highly urbanized areas of the state, and the same kind of amenities you’d get in Denver — so I think that’s a real benefit for the city going forward.”
Average annual pay in Colorado Springs ($46,901) is significantly lower than in Boulder ($62,020) and Denver-Aurora-Lakewood ($60,436) — but that’s no impediment to growth at this stage.
“You always like to have higher wages, especially when it relates to retail consumption and how that might be impacted,” Wobbekind said. “That part said, I think the lower wage may be one of the advantages that has really helped Colorado Springs. [It’s] a major urban area, with lower housing costs that have apparently spilled over from south Denver, and a manufacturing and aerospace and defense base that is a bit lower cost in terms of hiring people than it is specifically in Denver. …
“I think over time the [wage] gap will continue to close and as it closes, of course, you’ll have more of that spending power among the citizenry.”
Across El Paso County, average annual wages increased in 16 sectors: management of companies and enterprises (up $17,836, to $143,364); utilities (up $4,732, to $88,036); agriculture, forestry, fishing and hunting (up $2,288, to $29,900); finance and insurance (up $2,080, to $64,584); and construction (up $2,080, to $51,220). Average wages declined most in mining (down $3,016, to $66,040) and information (down $936, to $74,100).
Nuanced tech outlook
Over the past year, Colorado Springs saw some of its most notable job losses in the information sector, which includes publishing, telecommunications, film and television, and IT and software.
Whether job losses in the sector impact the city’s tech and cyber ambitions is an interesting question, said Tatiana Bailey, director of the UCCS Economic Forum. She said that’s due to “a conundrum in the data.”
Bailey said Bureau of Labor and Statistics numbers showing declines in Colorado Springs IT jobs don’t accurately reflect the situation on the ground. For example, figures for November job openings in the Springs show that four of the top 10 in-demand occupations are IT-related, with a particularly high need for systems engineers, systems administrators and network engineers.
Bailey contacted the BLS for an explanation, and found the problem: Employers don’t always know how to accurately categorize IT job openings when they report them.
“A hospital that’s posting IT positions … might put it in as administrative, and that doesn’t tell you that they’re looking to hire 17 software engineers,” Bailey said. “So here we have all these local job openings, which obviously tells you that the IT sector is alive and kicking in Colorado Springs … but at the same time these IT numbers from the BLS are showing declines. It’s not necessarily an accurate representation.”
That said, growth can’t be taken for granted in tech and cyber.
“I’m not a cyber expert … but I can tell you I follow enough to see how cyber is taking off in other cities, and the competition is really tough,” Bailey said. “It’s really, really tough. So whether we will become some type of cyber mecca really remains to be seen and is a big question mark.
“There are other states that just have literally hundreds of millions of dollars that they are successfully pouring into this, and they are becoming meccas. So I’d like to think optimistically — but saying we do a lot in cyber [isn’t] going to necessarily translate into a lot of jobs into the future. That remains to be seen.”
Statewide, the outlook is generally positive. Colorado’s employment and population will grow, but more slowly than in 2016 and 2017. Job growth in 2018 is constrained by the state’s aging population and low unemployment rate, according to the report.
Despite that, Colorado will remain in the top 10 states for employment growth. Overall, Colorado is projected to add 47,100 jobs in 2018, an increase of 1.8 percent, according to the forecast, with every major sector adding jobs.
The state’s population is expected to grow by 90,600, with most of that coming from people moving to Colorado.
Employers continue to struggle with talent shortages statewide and in Colorado Springs.
“I’m a little concerned overall with the state’s job growth slowing,” Wobbekind said, “but it’s really related much more to labor shortages than it is to businesses not doing well.
“But that is a deciding factor in terms of people looking to locate in Colorado. How easy is it going to be to recruit a workforce? How much labor is here?
“So it’s important that we continue to graduate people from UCCS and Colorado College and community colleges and develop some workforce for people as well as the rest of the state.”
“What [businesses] have consistently been saying in the Denver-Boulder area and now in our region as well is, ‘We’d love to grow some more but I can’t find the qualified workforce,’” she said. “As a state we’re still doing really well, but we’re almost shooting ourselves in the foot because we can’t train people quickly enough or attract people quickly enough to fulfill these labor needs.”
One of the most urgent questions facing Colorado Springs is how to attract qualified people, keep the qualified workers who already live here, and make sure locals are trained for today’s job needs.
“If we can do that,” Bailey said, “I think we hold a golden key to sustainable growth.”