Year ends with more area jobs lost than gained

Although Northern Colorado remained somewhat insulated from the worst ravages of the national economic downturn, as 2008 drew to a close the region’s employment picture wasn’t pretty.

In early December, the U.S. Bureau of Labor Statistics reported that the number of unemployed workers in Northern Colorado increased by 1,100 from September to October. The unemployment rate for the Fort Collins-Loveland area grew from 4.1 percent in September to 4.7 percent in November, up from a 3.4 percent rate in November 2007. In Greeley, the unemployment rate rose from 5.1 percent in September to 5.9 percent in November, up from 4.2 percent from a year earlier.

In mid-December, Fort Collins-based Advanced Energy Industries announced it would trim 114 jobs, or about 7 percent of its total workforce. The announcement brought the number of positions eliminated by AE in 2008 to 185.

Another Fort Collins company, RPM Electronics, announced in December it would close its doors in February, eliminating about 70 jobs. Even the holiday hiring period was expected to show the lowest seasonal retail job gain since 1988, according to an analysis by outplacement consultants Challenger, Gray and Christmas.

And a report issued in December showed Northern Colorado employers expecting to hire at a very modest pace during the first quarter of 2009. The Manpower Employment Outlook Survey found 12 percent of the companies interviewed in the region planned to hire more workers in the first quarter while 11 percent expected to decrease their payrolls. Another 71 percent said they expected to maintain their current staffing levels.

Economists downbeat

Local economists were downbeat about prospects for reversing the unemployment trend anytime soon. Regional economist John Green declared an official recession in Northern Colorado began in September, when fewer jobs were created in the region than lost.

“It’s reasonable to expect that employment in Northern Colorado may contract until early summer of 2009,” Green wrote in a column that appears in this issue of the Northern Colorado Business Report. Green predicts that the unemployment rate in Northern Colorado could rise as high as 7 percent in 2009 and the national unemployment rate could hit 9 percent.

Colorado State University economist Martin Shields, who issued a fairly optimistic economic report in early October that called for 4,000 new jobs to be created in the region in 2009, said in late December that his prognosis would have to be scaled back.

“I think consumer sentiment has changed dramatically,” he said. “The thought of GM closing began to permeate the American psyche, and the thought is just demoralizing.”

Shields had also called for a regional unemployment rate of 4.5 percent. “That looks kind of optimistic right now, at least for the first half of 2009,” he said.

Shields said the number of people in the Northern Colorado labor force from October through November declined – an especially bad sign.

“Normally, November is a strong hiring time because of the Christmas season, but it’s not been,” he said.

Not all bad news

All in all, the unemployment news for the state near the end of 2008 wasn’t all bad.

In January, Denmark-based Vestas Wind Systems began hiring the first of an estimated 600 workers for its new Windsor manufacturing facility.

In June, Massachusetts-based Constant Contact – an e-mail marketing and Internet survey company – announced it would hire 90 workers in 2008 and 400 over the next five years for its new Loveland facility. And in November, Connecticut-based Hexcel Corp. – manufacturer of wind turbine blade components – announced it would build a new plant near Vestas that Windsor city officials said would add about 100 new jobs when at full capacity.

Shields said his earlier forecast of new jobs to be added by sector remains generally the same, with the most new jobs in trade, transportation and utilities. The leisure and hospitality sector will post the next-highest number of new jobs in 2009, followed by education and health care.

But some of the optimism he felt about the region’s economy in September has given way to a more pragmatic view for 2009.

“I think it’s going to be a rough patch for the first half of 2009,” he said. “Maybe we’ll see something improve by fall. We’re going to feel it – there’s no doubt about it – but we’ll probably pull out of it a little quicker than other places.”

Shields said he is revising his earlier job sector growth estimates and will present those at the Northern Colorado Economic Forecast in Greeley on Jan. 15.

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