Expect a “modest” rebound this year in the Pikes Peak region from the slow job growth of the past two years, according to the latest economic forecast from the University of Colorado Colorado Springs’ Economic Forum.
The region’s employment growth has slowed from nearly 800 jobs a month during 2022-23 to about 100 jobs a month during 2024-25, mostly from slowing housing construction after mortgage rates doubled in 2022, says Forum Director Bill Craighead. His forecast was part of the Tri-Lakes Chamber of Commerce State of the Tri-Lakes Region and Economic Update Jan. 29 at the Marriott Colorado Springs Hotel.
The higher rates raised monthly mortgage payments beyond what many buyers could afford and prompted sellers to hang onto their homes as the cost of moving to another home escalated dramatically, Craighead says. However, the demand for housing remained strong, resulting in pent-up demand for homes that could fuel more construction and fuel more job growth amid stable mortgage rates, he says.
“There is potential for a rebound this year,” Craighead says. “There is pent-up demand for housing, particularly for demographic reasons — the largest share of the region’s population is entering the prime home-buying stage” of their life (late 30s). For more detailed information, see Craighead’s column elsewhere in the March issue of the Southern Colorado Business Forum & Digest.
A construction and job market rebound faces some challenges, however, from labor supply issues resulting from the Trump Administration’s immigration crackdown and tariff increases on construction materials, Craighead says. But immigrants make up a smaller share of the local labor market than the national average and the region’s higher-than-average household incomes can help fuel a job market rebound.
Craighead remains more concerned about the national economy as employers have become more cautious about both adding or laying off workers, resulting in fewer job openings and fewer workers voluntarily leaving their jobs. Those who are unemployed and looking for work are finding it is “much harder to find a new job” as the demand for labor is slowing faster than the supply.
Consumer spending continues to grow even as the job market slows as the nation’s economy benefits both from lower tax withholding rates and lower gas prices, Craighead says. That spending growth seems fragile, he says, and could disappear if the artificial intelligence-fueled stock market boom reverses and becomes a correction, delivering a significant hit to consumer confidence.