Pubdate: Fri, 15 Jul 2016
Source: Denver Post (CO)
Copyright: 2016 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Alicia Wallace

MANUFACTURING, RETAIL POSITIONS GROWING IN COLO.

Halfway through 2016, Colorado's employment growth is meeting 
expectations and the the economy continues to outperform the nation: 
Employment is growing faster here, housing is hotter and incomes are 
higher, according to a report released Thursday by the University of 
Colorado Leeds School of Business.

And Colorado's fledgling marijuana industry - which, in the grand 
scheme of things, is just a tiny sliver of the economic pie chart - 
is backfilling retail sales losses from the bankruptcy of a certain 
Englewood-based sporting goods retailer and bolstering otherwise 
sluggish manufacturing segments, according to the Colorado Business 
Review report.

"The legalization of marijuana is expected to continue to drive 
growth in retail sales and employment, but the impacts are in select 
areas where it has been legalized," the report's authors wrote. 
"Marijuana sales have shown strong year-over-year growth since it was 
legalized, and will likely outweigh other activities in the (retail 
sales) sector, such as the bankruptcy of Sports Authority."

Cannabis revenue totaled $486 million for the first five months of 
2016, up from $356.8 million in the first five months of 2015, 
according to Colorado Department of Revenue data released Wednesday.

The fledgling cannabis industry also was cited as a potential 
catalyst for a sudden rise in manufacturing jobs.

Food sector was stale

For more than a decade, employment growth in Colorado's food 
manufacturing sector was stale, gaining an average of 0.1 percent a 
year from 2001 to 2013, said Patty Silverstein, president and chief 
economist at Development Research Partners in Jefferson County.

Recreational cannabis sales began in 2014. That year, "we had a 3.5 
percent increase in employment. In 2015, a 4.9 percent increase in 
food-manufacturing employment," she said. "The data doesn't allow us 
to slice and dice to say, 'These are indeed edibles or not,' but the 
recognition is this is where they would be classified."

Similarly, jobs in chemical manufacturing declined an average of 2.2 
percent a year from 2002 to 2012. In 2013, the trend reversed, and 
the sector logged a 2.1 percent increase. Jobs increased 1.4 percent 
in 2014 and 3.9 percent in 2015, she said.

Cannabidiol extraction would be classified under chemical 
manufacturing, she said.

Food and chemical manufacturing added 1,200 jobs between 2014 and 
2015 and manufacturing as a whole added 6,100 jobs, she said. 
Manufacturing is up 1.8 percent through May, she said, noting that 
the sub-sectors' employment figures for 2016 were not available.

"Is it cavalier of me to say (manufacturing growth is directly 
correlated to the cannabis industry)? Absolutely," she said. "I 
cannot prove or disprove it. But you look at who are the new entrants."

The Colorado Business Review and the latest labor data provide a 
window into the potential economic impacts of a brand new industry to 
the state, but the state's economic growth still is centered on the 
output of sectors such as real estate, government, professional and 
scientific services, information and manufacturing, said Brian 
Lewandowski, associate director of the Leeds School's Business 
Research Division.

Point higher than nation

Estimates released in June show that Colorado's real gross domestic 
product had grown 3.6 percent in 2015, a percentage point higher than 
the nation, according to the report.

Through May, employment growth was "consistent with expectations" 
released in December, Lewandowski said. Growth in sectors such as 
leisure and hospitality, construction, government and education 
offset the hefty 5,300 job losses suffered in the mining sector, 
which encompasses industries such as oil and gas, he said.

For the 12-month period that ended in May, the state tallied a net 
job addition of 62,000, a couple thousand jobs shy of the projections 
of 65,100 jobs made in the Colorado Economic Outlook in December.

Lewandowski said he anticipates that Colorado could see additional 
losses in oil and gas employment. However, the state's diverse 
economy should help to continue to serve as a buffer.

Nationally, there have been some "bumps in the road," he said, but 
June brought some good news with a rebound in hiring. The U.S. job 
market added 287,000 jobs in June, a significant upswing from May's 
paltry 11,000 new jobs.

"I think that there's not a broad signal nationally that we're headed 
to a recession or that the economy's turning, but we are keeping an 
eye on it," he said.
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MAP posted-by: Jay Bergstrom