What’s Working: Colorado Springs’ weaker job market hasn’t slowed economic development wins

Tamara Chuang | Business/Technology Reporter

There are more than 200 job openings at UCHealth hospitals and facilities in the Pikes Peak region, according to a quick search on job board Indeed.

That’s not unusual to have hundreds of openings since UCHealth, one of the largest nonmilitary employers in the region, has more than 7,000 employees in the Colorado Springs area — and that doesn’t include Pueblo, said Cary Vogrin, spokesperson for UCHealth in Colorado Springs. But that said, it has fewer job openings than a year ago.

“In fact, there are 52% fewer jobs open in this region in May 2024 than in May 2023,” Vogrin said in an email. “This is specific to our hospitals in Teller and El Paso counties, and we attribute the lower number to turnover stabilization and opportunities for upward career mobility through UCHealth’s Ascend Career Program, in which employees can continue their education free of charge for certain clinical programs.”

Retaining workers by giving them reasons to stick around may be a reason why the region is seeing some job-growth sluggishness. About 100 jobs were added to the El Paso and Teller counties payrolls in March, which is below the pre-pandemic monthly average of 588 in 2018 to 2019 and well below 900 average per month last year, according to the Bureau of Labor Statistics and an analysis by the University of Colorado Colorado Springs Economic Forum. January and February were worse with monthly declines of 400 and 500 jobs, respectively.

Meanwhile, the area’s unemployment rate was up nearly a full percentage point in March, at 4% compared with a year earlier at 3.1%.

Colorado Springs has a lot going for it, with multiple announcements of corporate expansions and new jobs so far this year. But economic development is just one part of the local economy. The delayed pain of higher interest rates may be impacting the region more so than the rest of the state or nation, theorized Bill Craighead, executive director of UCCS Economic Forum.

“With our high growth and population turnover, construction and real estate are more important for the local economy and nationwide, so I think we’re more interest-sensitive than many other places,” Craighead said.

It’s a popular city for newcomers, largely because of the military operations that have people coming and going. About 5.9% of the city’s population is in the armed forces. That’s led to stats that show Colorado Springs has nearly twice the rate of newcomers moving from out-of-state compared with Denver. According to the U.S. Census, 6.6% of the metro Colorado Springs population lived in another state a year ago, compared with 3.5% in metro Denver.

Craighead also looked at local sales tax collections and noticed they’ve been sluggish, partly driven by lower sales in furniture, appliances and electronics category, or “things that people buy when they’re moving into a new house,” he said.

“Our local economy is going to be more sensitive to interest rates than a lot of other places because we have so much real estate activity,” he said. “It’s not just growth, but you have really high population turnover. If you look at the share of real estate agents in our local labor force, it’s three times the national rate.”

Still, even a 4% unemployment rate is considered low. And being down several hundred jobs in one month pales in comparison to how many people are employed in Colorado Springs. That came in at around 365,147 in March, which is about 2,400 more than a year ago, according to BLS data.

“The unemployment rate is minuscule and is an advantage for our region,” Johnna Reeder Kleymeyer, president and CEO of Colorado Springs Chamber and EDC, said in an email. “It shows that we have available talent to fill new and existing jobs. Companies are less likely to locate to a region with full employment.”

And then there’s the newcomers

One newcomer is Tim Vanderhoof, who joined the Colorado Springs Chamber as its vice president of economic development. He moved to the city from Florida eight months ago.

He’s only been around for a few months but he’s gotten up to speed with what happened last year and so far this year. And while he pointed out multiple times that the big economic wins are just a small part of the jobs created in the region, the economic-development activity hasn’t slowed one bit.

“We have not seen people pull back,” Vanderhoof said. “We’re seeing just the opposite. Our activity level is picking up. I believe last year, we closed — meaning we engaged, we helped and the project was won — it was nine projects. We are on track this year to eclipse that and you know, I always say the data doesn’t lie. It’s in the numbers. And we are seeing a good, strong but sustainable uptick.”

Since January, several companies have announced plans to add more than a combined 1,100 jobs in Colorado Springs. Some recent announcements:

• In April, Omni Federal, an aerospace and defense contractor, committed to adding 500 new jobs that on average will pay $150,000 a year. According to Colorado Springs Chamber officials, Omni did not receive any state, city or county incentives.
• Also in April, Spectrum Advanced Manufacturing Technologies, often tapped by aerospace companies to make electronic components and devices, announced plans to build a 12,000-square-foot facility and add 100 jobs with an average annual wage of $85,407. The company already has a manufacturing plant in the area and employs 54 people. It did receive local and state incentives.
• In February, cybersecurity firm Invictus International Consulting announced plans to expand in the city and add 130 new jobs. Alexandria, Va.-based Invictus currently employs 300, with 65 in Colorado, according to state officials. 
• In January, Microchip Technology said it would use the $90 million grant from the federal CHIPS Refundable Tax Credits program to expand its fabrication plant in Colorado Springs, hire 400 more workers and triple production. The company already has a local manufacturing plant, and employs about 1,000 people in the state. 

But a lot of the company expansions have long-term job-growth goals of five to 10 years. Getting more of those higher-paying jobs to town attracts folks leaving the military who may already have government clearance or an interest in defense, cybersecurity and aerospace, for which Colorado Springs is a hub.

“The jobs are forecasted. No one is creating 500 jobs overnight. It’s not really possible nor sustainable,” Vanderhoof said. “Most of these larger job creation numbers, the 100, the 200 and up to 500 are typically going to be over anywhere from five to 10 years, which we want because that’s smart and calibrated growth that an employer can maintain. They’re bringing in more revenue and they’re producing more so they can hire more so that it’s sustainable.”

Data does get revised though. Last year, revisions pushed payroll gains in the Colorado Springs metro area to an average of 900 new jobs per month. The declines earlier this year could see some revision later on and so Craighead at UCCS said he’s waiting for the April numbers to come out before he gets too worried.

“I don’t want to get too concerned yet based on the three months of data, but payroll growth was definitely weak. But if it comes in weak again, then that’s confirmation that we are having a bit of a slowdown,” Craighead said. “But even by historical standards, 4% is still a pretty low unemployment rate.”

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Thanks for sticking with me for this week’s report. Remember to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara

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What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.

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