Springs job market will begin slow recovery in 2010, economist predicts

The Colorado Springs job market will begin to recover next year from its deepest recession in decades, but the improvement will be gradual, with many industries continuing to struggle, the Southern Colorado Economic Forum predicts in its forecast released today.

While area employers will begin adding workers by mid-2010, the job gains will replace only about one third of the nearly 9,000 jobs lost in the past year as retail sales, commercial construction and other major indicators post weak advances from this year’s sharply lower levels, according to the forecast presented at the forum’s annual conference this morning. More than 500 people have signed up to attend the half-day event at the Antlers Hilton hotel.

“The recession has ended and the economy began to recover earlier this year,” said Fred Crowley, the forum’s senior economist. “A recovery in the job market is coming, but it won’t be rapid. We will see significant improvement in some sectors and unemployment will decline to the low 6 percent range by the end of (2010). Next year will still be a struggle in many people’s minds. I don’t think we will see significant growth across the local economy until 2011.”

For next year, the forum expects local payrolls to grow by about 2,800 jobs, or 1.2 percent, and the local unemployment rate to average about 7 percent. That compares to payroll job losses estimated to total 8,800 this year and an unemployment rate expected to average nearly 8 percent. That would be a slower recovery for the local job market than in 2004, when the local economy added 3,100 jobs after shedding 7,600 jobs during the previous two years.

The local recovery began this summer with the arrival of 3,500 troops at Fort Carson from Fort Hood in Texas as part of an expansion of the post that has added more than 8,000 soldiers during the past four years, Crowley said. The local job market will strengthen next year as the national economic recovery begins picking up steam, prompting businesses locally to hire workers to rebuild inventories depleted during the recession, he said.

“Consumers have retrenched and pared down debt. Sooner or later they will get their household balance sheets in order. That will restore stability and people will get out there and spend,” said Tom Zwirlein, the forum’s co-founder and director and a University of Colorado at Colorado Springs business professor. “I expect there will be pressures to increase wages. Many workers accepted pay freezes and wage cuts to keep their jobs, but that can’t go on forever.”

The forum also will include a keynote address on the national and international economic outlook from Eugenio Alemán, senior economist for Wells Fargo Bank, a panel discussion on the local aerospace and renewable energy industries and a town hall meeting on “Planning ahead in the Pikes Peak region.” Zwirlein said he also will issue a call for action to integrate local economic development strategies, further diversify the local economy, rebuild trust in city government and reform conflicting state constitutional amendments.
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