Colorado’s employment will recover to pre-pandemic levels this year, with some industries already fully recovered, and the state’s inflation rate remained lower than the national average last year, according to the Colorado Secretary of State’s Quarterly Business & Economic Indicators report for the fourth quarter of 2021.

“The state is in recovery mode,” according to the report, released Thursday by the Leeds Business Research Division at the University of Colorado Boulder in conjunction with the Secretary of State’s Office. “After rebounding above pre-recession levels in Q2 2021, Colorado’s GDP increased 5.5% year-over-year in Q3 2021, ranking the state 10th.”

GDP is gross domestic product – a broad measure of the state’s domestic production and a leading economic indicator.

The report’s authors noted the state’s strong labor force participation and jobs recovery.

Every major Colorado industry will experience job growth in 2022, report says

“The labor force participation rate ranked 4th-highest in December, totaling 68.3% – nearly back to the pre-recession high,”  the report said.

“In Colorado, 376,300 job losses were recorded from February to April 2020, but 335,500 jobs were added back from May 2020 through December 2021,” the report noted. “Colorado’s employment remained 40,800 (1.4%) below the January 2020 peak, but the state did post strong year-over-year in December (5.8%, 152,000). The largest annual percent increases came from Leisure and Hospitality, Mining and Logging, and Professional and Business Services.” 

Those industries were hit hardest by the pandemic-related shutdowns. 

Experts expect “headwinds” for some industries in 2022, according to the report.

“The Colorado Business Economic Outlook is for a full employment recovery in 2022; however, the recovery by industry is fragmented. Some industries (e.g., Finance and Insurance, Professional and Business Services) have posted strong recoveries, while other industries (Leisure and Hospitality, Mining and Logging) continue to record jobs deficits.”

“Business Leaders continue to report concerns – COVID, worker shortages, supply chain, interest rates, and inflation,” according to the report. “For the first time in the last 9 years, inflation in the Denver-Aurora-Lakewood (metropolitan statistical area) grew at a slower rate than the nation in 2021-1.2 percentage points lower.”

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New business filings, as previously reported in the third quarter report, set a record in the state.

“New entity filings accelerated in 2021, growing by a record number to reach a new peak (157,828); existing entity renewals also reached record levels (657,660),” according to the report.

Much of that growth is likely due to the “Great Resignation” trend sweeping Colorado and the nation, as those close to retirement age left early due to the pandemic and many former corporate or service workers left to form new businesses.

But conversely, the state also saw an increase in business dissolutions in 2021.

Owners shuttered 11,363 Colorado businesses in the fourth quarter, a 13.1% year-over-year increase and a slight increase from the third quarter.

For the year, “the 12-month trailing total of dissolution filings – 40,413 – was up 7.7% year-over-year and 3.4% quarter-over-quarter,” the report states. “The spike in dissolutions during the last recession occurred in Q2 2011, after the official end of the recession.”

Coloradans saw their pocketbooks grow in 2021, as the state’s per capita personal income of $68,275 ranked Colorado ninth in the nation. Per capita personal income growth of 7.8% ranked Colorado fifth in the nation, the report states.

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Residents needed that extra cash, as prices spiked more in the fourth quarter than they had in almost 40 years.

“The national consumer price index increased 7.1% year-over-year in December 2021 – the highest monthly increase since June 1982 (7.2%),” according to the report. “Annually, national prices increased 4.7% in 2021 – the highest increase since 1990. Denver-Aurora-Lakewood prices rose 3.5% during the same period – the highest increase in a decade (2011).”

The authors of the report – Secretary of State Jena Griswold; Richard L. Wobbekind, associate dean for business & government relations, senior economist and faculty director of the Business Research Division; and Brian Lewandowski, executive director of the Leeds School of Business Research Division – were scheduled to  hold a news conference Thursday morning to discuss the report.