Every major Colorado industry will experience job growth in 2022, with many sectors returning to pre-pandemic levels, but leisure and hospitality won’t recover for years, according to the 57th annual Colorado Business Economic Outlook.

The report, prepared by the University of Colorado Leeds School of Business, was presented Monday at the Grand Hyatt in downtown Denver.

“We’re so grateful the economy is estimated to gain 87,600 jobs this year,” said Richard Wobbekind, faculty director for the Leeds Business Research Division. “Growth will continue in 2022, with the state projected to get an additional 73,900 jobs, a 2.7% increase — but very importantly spanning all sectors of the economy.

“We do believe Colorado will continue to outperform the nation.”

The report documents how the leisure and hospitality sector was decimated in 2020 by the pandemic. It includes performing arts, entertainment, sports, recreation and food services.

“After losing 73,300 jobs in 2020, the industry is expected to recover 33,120 in 2021 and another 31,700 jobs in 2022,” Wobbekind said. “However, despite this rebound, employment will remain well below 2019 levels. … Colorado’s restaurant industry suffered from the most challenging environment in our lifetimes in 2020, losing $3 billion due to the dining shutdowns, capacity restrictions and other operational obstacles.”

Tourism spending hit $15.4 billion in 2020, down 36% from the $24.2 billion spent in 2019, according to the report. There were 74.1 million travelers to Colorado in 2020, down 14.7% from the record 86.9 million visitors in 2019.

“Tourism spending isn’t expected to return to 2019 levels until 2023 or ‘24,” Wobbekind said.

State Demographer Elizabeth Garner said 2021 estimates show “it was the slowest population growth year for Colorado in three decades.”

“This was driven not only by slow net domestic migration, but almost zero international migration,” Garner said.

About 61,000 people will move to Colorado in 2022, she predicted, for a growth rate of about 1%.

As for commercial real estate, the industrial market space is incredibly strong while the office market still struggles as not all workers have returned to the office — and remote working is here to stay, according to the report.

“The future use and demand for office space will continue to evolve as flexibility and the hybrid work model will be the norm going forward,” Wobbekind said.

Office vacancy in metro Denver rose from 15% in the third quarter of 2020 to 19.4% in the third quarter of 2021.

It was also the slowest year for the city’s development pipeline since 2013, he said.

But the industrial market saw 46 straight quarters of positive net absorption — more space leased than vacated — largely because of the demand for distributors’ warehouse space driven by e-commerce.

“Construction boomed in 2021, particularly in Colorado’s housing industry, and that trend is expected to continue into 2022,” according to the report. “Another 48,000 single family and multifamily residential units are projected to be added in the state in 2022, despite persistent headwinds. Those headwinds — particularly supply chain woes, inflation and labor shortages — are also expected to impact other industries in the state.”

Economists also expect interest rates to rise next year.

“The market expects the Fed to raise interest rates one to two times in 2022, starting around midyear,” Wobbekind said.

“What bodes well for Colorado is we have the fourth highest labor force participation rate in the country,” he added. “That should keep us primed for the recovery.”