Data dive: Colorado manufacturing outperforms expectations

By Brian Lewandowski | Aug 07, 2017

In 2016, Colorado ranked 30th in total manufacturing jobs, 21st in the number of manufacturing firms, 28th in total manufacturing wages, and 14th in average annual industry pay, according to the Bureau of Labor Statistics. Colorado is not a manufacturing-intensive state; manufacturing makes up a smaller share of the Colorado economy compared to the national average.

In 2016, the state ranked 40th in the manufacturing share of GDP, with just 7 percent of nominal GDP coming from manufacturing. The same year, Colorado ranked 41st for concentration of manufacturing employment (5.6 percent of total covered nonfarm employment), 37th for concentration of manufacturing firms, and 28th for concentration of total industry wages. Colorado's manufacturing is dominated by durable goods -- 62 percent of industry GDP is in durable goods versus 38 percent in nondurable goods -- the 13th greatest concentration of durable goods activity in the country.

Through the decades

Manufacturing recorded a net gain in jobs in the 1990s. However, the 2000s were a different story -- the state lost manufacturing employment in all but the first year of the decade. The losing streak lasted 10 years, ending in 2010, when Colorado's manufacturing industry made an about-turn and began expanding. From 2001 to 2010, Colorado lost a third of its manufacturing employment base (-63,400 jobs). After 2010, the industry grew by 14.5 percent in the state over the past 6 years, adding 18,000 manufacturing jobs. Colorado's manufacturing employment remains in deficit by 48,000 jobs from its peak in 1998.

2016 by the numbers

Colorado was one of 24 states that added manufacturing employment in 2016, and one of only 14 states that added jobs at a pace greater than 1 percent. The industry expanded 1.1 percent in Colorado, outperforming national industry growth (0.03 percent). Average annual pay for the industry was $66,329 in 2016, or 21 percent above the average for all industries in Colorado, but stagnant overall from 2015 to 2016 (-0.2 percent). The sluggish wage growth is largely the product of growth in lower-wage industries and stagnation in higher-wage industries -- nondurable goods industries grew 3.2 percent in 2016 but pay below-average wages ($52,051), while durable goods industries fell 0.2 percent but pay above-average wages ($75,483).

2017 industry activity

The Current Employment Statistics (CES) from the Bureau of Labor Statistics provides an early indication of industry performance. Year over year, industry employment increased 0.1 percent in June. While four of the first six months of 2017 recorded employment declines, the Colorado Department of Labor and Employment analysis reveals expectations of upward revisions averaging 0.7 percent in the state.

Colorado's industry composition

Colorado's manufacturing industry is more concentrated in durable goods than nondurable goods. Durable goods represent 62 percent of industry GDP, 61 percent of industry employment, and 69 percent of industry wages. Of the 19 manufacturing subsectors, three made up 50 percent of the industry GDP in Colorado in 2015:

  • Computer and electronic products manufacturing
  • Food and beverage and tobacco products manufacturing
  • Chemical products manufacturing

While Colorado's manufacturing sector is relatively small, the composition of the sector is similar to other states. It is not unique that computers and electronics and food, beverage, and tobacco products are the first- and second-largest manufacturing sectors. The former is the largest manufacturing sector in 11 states, and the latter is the second-largest manufacturing sector in 21 states.

Far-reaching impact

Examining the inputs to production, the manufacturing industry sources goods and services from all other industries. Data for Colorado from IMPLAN show that the top 10 industries supplying the manufacturing industry include:

  1. Wholesale Trade
  2. Ag, Forestry, Fish, and Hunting
  3. Management of Companies
  4. Professional, Scientific, and Technical Services
  5. Transportation and Warehousing
  6. Mining
  7. Real Estate and Rental
  8. Finance and Insurance
  9. Utilities
  10. Administrative and Waste Services
  11. Additionally, the manufacturing industry is an input to production for all other industries. As a percent of their respective production, the top 10 industries that source from the manufacturing industry include:
  12. Manufacturing (sourcing from other manufacturers)
  13. Ag, Forestry, Fish, and Hunting
  14. Construction
  15. Accommodation and Food Services
  16. Transportation and Warehousing
  17. Other Services
  18. Health and Social Services
  19. Educational Services
  20. Information
  21. Mining

Brian Lewandowski is associate director of the research division at CU's Leeds School of Business. Contact him at