The COVID-19 recession of 2020 was the deepest on record but also the shortest, setting the stage for Colorado’s ongoing recovery that’s benefited some in the state while leaving others behind, a pair of prominent local economists said Thursday during the Boulder Economic Summit.
Despite the rapid economic turnaround, headwinds such as new virus variants, supply-chain snags, labor issues and inflation threaten to roll back progress, according to University of Colorado Leeds School of Business Business Research Division executive director Brian Lewandowski.
Real gross domestic product has climbed back to higher levels than prior to the pandemic, but remains lower than it would have been if the economy was operating at full capacity.
Experts have predicted annual GDP growth of as high as 7%, but the previously mentioned headwinds “have tempered optimism from economists,” Lewandowski said.
Industry composition, tourism, commuters, retail mix, development opportunities and population growth are combining to create an inequitable recovery in different areas of the state.
For example, the Boulder area was hit particularly hard by the 2020 closure of the University of Colorado Boulder and many of the region’s federal labs.
These negative impacts were somewhat buoyed by Boulder’s strong professional-services sector, according to Colorado Legislative Council chief economist Kate Watkins.
“Tech jobs, the ones that you can do remotely, have seen ongoing growth throughout” the recovery, she said.
The professional-services sector, such as computer programmers, architects or accountants, “is one of Boulder’s key strengths,” Lewandowski said, and is one of the few industries to surpass the pre-pandemic employment peak nationally.
“Higher-income workers were relatively unscathed by the pandemic,” Watkins said, but that’s not the case with other employee groups.
Workers who are Black, Hispanic, female or have less than a high school education did worse during the pandemic recession and have been slower to recover.
Looking ahead, economists are feeling optimistic about Colorado’s competitive edge regionally due to strong in-migration.
“We didn’t exactly have a baby boom during this last recession, but we still saw population growth,” and that growth is expected to pick up in coming years, especially along the Interstate 25 corridor, Watkins said.
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