As of April 2025, Colorado’s economy is experiencing a period of slower growth following years of rapid expansion. While the state remains economically resilient, several factors are contributing to this deceleration.
Economic Growth and Job Market
In 2024, Colorado’s GDP grew by 1.6%, ranking 41st nationally, and personal income growth was 39th in the nation. Job growth reached nearly 2%, with approximately 46,800 new jobs added. However, forecasts for 2025 predict a slowdown, with a projected 1.2% increase in employment, equating to about 36,700 new jobs. The education and healthcare sectors are expected to add the most positions in raw numbers, while the natural resources and mining industry is anticipated to experience the fastest growth. University of Colorado Boulder+3Axios+3Law Week Colorado+3
Key Economic Sectors
Professional and Business Services: This sector continues to be a significant contributor to Colorado’s economy, with a forecasted growth of 1.6% in 2025. The state’s reputation for innovation and entrepreneurship supports this growth. University of Colorado Boulder+1Law Week Colorado+1
Natural Resources and Mining: Despite its smaller size in terms of total jobs, this sector is vital to Colorado’s economy. It is expected to grow by 4.4% in 2025, driven by modest growth in energy production. University of Colorado Boulder
Construction: After a slight decline in 2024, the construction industry is projected to rebound in 2025, with an increase of 6,000 jobs, largely due to a rise in single-family home permits. University of Colorado Boulder
Challenges and Considerations
Several factors are influencing Colorado’s economic trajectory:BizWest+1University of Colorado Boulder+1
Demographic Shifts: Slower population growth, particularly through net migration, is creating headwinds for labor force and job growth. The state’s aging population is contributing to this trend. BizWest+1Axios+1
Housing Affordability: Higher mortgage rates and limited housing supply continue to pose affordability challenges, especially for workforce housing. University of Colorado Boulder
Labor Force Participation: The labor force participation rate remains below pre-pandemic levels, with many jobs going unfilled. In October 2024, the rate was 62.6%, compared to 63.3% in January 2020. University of Colorado Boulder
Emerging Opportunities
Despite these challenges, Colorado is positioning itself as a leader in emerging technologies:Business Insider+1University of Colorado Boulder+1
Quantum Computing: Boulder is becoming a significant hub for quantum computing, benefiting from federal investment, notable universities, and a burgeoning quantum incubator. Business Insider
Semiconductor Manufacturing: The Biden administration announced $162 million in funding to expand computer chip factories in Colorado, including $90 million for a plant in Colorado Springs. This initiative aims to reduce dependence on foreign manufacturing and create jobs in the state. AP News
Conclusion
While Colorado’s economy is experiencing slower growth, it remains diverse and resilient. The state’s focus on innovation and emerging technologies positions it well for future economic opportunities. Addressing challenges such as housing affordability and labor force participation will be crucial in sustaining long-term economic health.