When it comes to having the strongest job growth across the widest array of industries over a long period, Colorado and its neighbors didn’t just sprint out of the Great Recession, but they are winning the marathon too, according to an analysis of counts from the U.S. Bureau of Labor Statistics.
“Distance is no longer an obstacle in the West. We have our own momentum,” said Ray Rasker, executive director of Headwaters Economics in Bozeman, Mont.
Using payroll counts from the U.S. Bureau of Labor Statistics, The Denver Post ranked every state and the District of Columbia for its rate of job growth in 13 sectors from April 1990 to April 2016. That period covered the tech and housing booms, as well as three recessions.
A state’s ranking in each sector was added together to come up with a total score. States with low scores did better at achieving higher rates of job growth across more sectors.
Utah had the best score of any state, followed by Nevada and Texas. Colorado and Arizona tied for fourth, followed by Idaho, North Dakota and Montana. At the other extreme, laggards included Connecticut, New Jersey, Maine, Michigan, Illinois and the District of Columbia.
“The number one reason companies locate here is the labor market, and that has three components: costs, quality, supply. We have done very well on all of those,” said James Wood, director of the Bureau of Economic and Business Research at the University of Utah.
Population growth is key to providing a strong labor supply, although it isn’t entirely clear to what degree job growth is fueling population gains or vice versa.
“There has been this long migration West,” said Brian Lewandowski, associate director of the business research division with the University of Colorado’s Leeds School of Business.
Between 1990 and 2015, Colorado’s population rose by 2.1 million, or 65 percent, versus a 28 percent gain nationally, Lewandowski said. Those population gains have allowed the mountain states and some southwestern states to race ahead as other regions stagnate.
Colorado garnered a top-five ranking among states in seven of the 13 sectors, including mining, government, construction, leisure and hospitality, other services, retail trade and information.
Education and health services, along with wholesale trade ranked eighth and ninth, while the state ranked 11th for job growth in the financial sector.
Professional and business services, manufacturing and transportation and utilities weren’t as robust as the other sectors, but none ranked in the bottom half for growth.
Construction had the largest percentage gains in Colorado during that 26-year period, 166.8 percent, followed by education and health services at 151.4 percent and professional and business services at 129.2 percent.
Part of the state’s strong showing reflects the happenstance of timing. Back in 1990, Colorado was emerging from a severe oil and gas contraction and struggling with a savings-and-loan crisis.
If oil and gas jobs — a big component of mining employment — were depleted in 1990, a drilling boom in the Denver-Julesburg Basin in Weld County fueled a hiring surge, at least through 2014. Although the petroleum industry is now contracting, the gains have remained large enough to overcome layoffs in metal and coal mining.
Only North Dakota did better than Colorado in adding mining jobs, with a nearly fourfold increase from 1990. Kentucky, with its concentration of coal workers, had the worst showing, losing two out of three mining jobs.
Manufacturing, the only sector to show an overall employment decline, also stood out. Only eight states managed to add more manufacturing workers over the past 26 years, led by Nevada, North Dakota, South Dakota, Utah and Idaho.
In Colorado, manufacturing payrolls are 15.9 percent smaller than they were 26 years ago, which ranked 20th among states. New York, New Jersey, Rhode Island and the District of Columbia, by contrast, lost half or more of their manufacturing jobs.
Lewandowski said many of the state’s strongest sectors rose in tandem with population, including government, retail, and construction.
Rasker also said tourism shouldn’t be overlooked, primarily for its ability to help areas overcome their geographic isolation. “Industrial” tourism justifies airport investments, allowing for the expansion of flights. Those connections are key to promoting economic growth, he said, pointing to the example of Bozeman Yellowstone International Airport, which tripled capacity to accommodate skiers and other visitors.
“As soon as that happened, the high-tech companies followed,” Rasker said.
Along with manufacturing, Utah and Nevada appear to be doing better at winning over transportation and distribution jobs than Colorado.
“We did go through some transportation pains. Other states became more favorable for the trucking industry,” Lewandowski said.
Rasker said the region is hitting its stride and that commerce among Western states and the Pacific Northwest will only grow. That should further reduce the long-running dependence on California.
