Colorado forecast shows steady economic growth in 2026

Colorado’s economy is expected to grow steadily in 2026 despite a shifting national landscape and slowing population gains, according to the 61st annual Colorado Business Economic Outlook Forum hosted by the Business Research Division at the Leeds School of Business.

The forecast, developed by the Business Research Division in partnership with the State of Colorado and more than 130 business, education and government leaders, projects job growth of 0.6% in 2026, equal to 17,500 jobs. Eight of the state’s 11 major industries are expected to expand.

The education and health services sector is expected to add the most jobs in 2026, followed by trade, transportation and utilities and government.

Three sectors are projected to post modest losses: information, leisure and hospitality and professional and business services.

Colorado’s real GDP is projected to rise 2.1% in 2025 and 2.9% in 2026, outpacing national growth, which is expected to reach 2.1% in 2026. Although consumption, investment, and government spending are expanding more slowly, consumer resilience has remained strong, with retail sales and spending holding up despite weaker confidence readings.

“Moderate growth in GDP at the national and state levels may appear inconsistent with the sluggish employment growth outlook,” said Richard Wobbekind, senior economist at the Leeds School of Business and faculty director of the Business Research Division. “The labor market is constrained, particularly by slower population growth that is weighed down by lower levels of international immigration. When employment cannot expand as quickly, productivity has to pick up.”

Several economic indicators showed faster growth or improved rankings compared with last year, and Colorado continues to rank among the top 10 states for per capita income, average annual pay and labor force participation.

“Job growth in Colorado has been subdued in 2025, and growth is absent from some of the usual areas of strength in the state’s economy,” said Brian Lewandowski, executive director of the Business Research Division. “Barring some extraordinary economic event, Colorado is projected to maintain growth in output, income and employment in 2026, although job growth will remain below average.”

Along with industry analysis, the report outlines key trends and challenges that will shape Colorado’s outlook in 2026 and provides a closer look at several major indicators:

• Population growth. Colorado’s population is expected to rise 0.6% in 2026 with a gain of 35,100 people. The increase includes 19,500 from natural growth and 15,700 from net migration.
• Labor force growth. Demographic shifts, including retirements among baby boomers and slower international migration, continue to influence the labor force. Colorado’s participation rate was 67.4% in August 2025, down from 68.1% the year before but above the national rate of 62.3%.
• Unemployment. Colorado’s unemployment rate is projected to fall from an estimated 4.5% in 2025 to 4.1% in 2026 as labor supply tightens.
• Personal income. Personal income and wage and salary income are projected to increase by 4.5% and 3.6% in 2026.
• Inflation. Inflation averaged 2.3% in 2025 in the Denver-Aurora-Lakewood area. Statewide inflation is projected to be 3% in 2025 and 3.5% in 2026.