Colorado faced weak job growth throughout 2025.

More than half of the 11 largest sectors are expected to have recorded job losses by the end of the year, according to the annual economic outlook from the Business Research Division at the University of Colorado Boulder, released Monday.

But 2026 is expected to see improvement, as economists forecast only three sectors will see job losses.

Preliminary estimates show 2025 had 0.4% growth. Next year, job growth could improve to 0.6%.

Colorado has been in a cycle of sluggish growth since 2024 that was exasperated this year by tariffs and federal cuts. The slowdown is largely driven by the professional and businesses sector, the second-largest employer in the state, which saw employment drop 5.8%.

Job losses also hit retail and transit (-2.6%), information (-2.4%), manufacturing (-1.4%), financial activities (-0.5%) and other services, such as religious and grant nonprofit work (0.3%).

In 2026, business and professional services and the information sectors are expected to continue on the trend. In addition, economists expect the hospitality industry to slow down and see job losses.

Here’s a breakdown of some of the top industries in Colorado to watch next year.

PROFESSIONAL AND BUSINESS SERVICES

The professional and business services sector is in its third year of job losses, a trend that’s expected to continue.

This industry covers a variety of careers requiring higher education such as engineering, architecture, scientific research, legal work, computer design and economy. It covers about 17% of the state’s workforce, said CU Boulder economist Richard Wobbekind.

As technology companies restructure, cuts to federal research funding also have added to the industry’s struggles.

When President Donald Trump returned to office for his second term, his priority to trim down federal spending hit Colorado’s scientific community and private companies who partner with universities. It’s led to job losses and the cancellation of clinical trials, according to the report. It’s affected various companies who work in biotech, oil and gas and energy.

The uncertainty has also hindered companies from making longer-term plans and hiring new employees, the report said.

Economists expect some improvement next year with job losses in this industry at 1.1%.

AGRICULTURE

The agriculture industry in Colorado has “sharply” diverged into two sections, livestock and crops, according to CU Boulder economists.

It was a good year for the cattle industry as prices for beef were at record highs. Meanwhile, Colorado crops like wheat had one of its worst years.

“It’s the mercy of the markets,” Wobbekind said.

There were many healthy crop harvests around the world that helped drive down prices for corn and wheat, he added. Meanwhile, there’s been high demand for beef and low herd numbers that have driven up the price of cattle.

Agriculture is already a difficult sector to predict, but the report said Trump’s trade disputes and tariffs have made it more difficult for farmers to plan next season’s crops.

Economists forecast Colorado’s farm income to fall to $1.8 billion next year, down from $2.2 billion in 2025. It’ll be driven by low herd numbers (therefore less feeder cattle to sell), falling milk prices, and a reduction of egg production in Colorado, the report said.

Beef producers are having to figure out when to rebuild their herds and maximize their profits at the peak of their cycle as Trump made a deal with Argentina to import Argentinian beef and lower prices, the report said.

There’s also a growing concern that crop farms are struggling to pay back their loans, as delinquencies rise nationwide. Wobbekind said more farmers will not get financing, as banks become more hesitant to loan to the sector.

RETAIL

The trade, transportation and utilities sector is the largest employer in the state.

This industry covers the movement and sales of consumer goods from wholesale, retail, warehousing and trucking. It saw a 2.6% drop in employment in 2025, preliminary estimates show.

Economists forecast this sector to rebound in 2026 with 4.6% employment growth.

Consumer spending exploded following the pandemic, though the boom subsided in the last few years due to high inflation, rising interest rates and growing debt.

Retailers slowed down hiring due to slower consumer spending and the rise of tariffs, the report said. This was one of the largest sectors exposed to tariffs, which primarily affected imported goods sold at retailers. The changing federal policies raised the cost of doing business, that were either absorbed by the store or passed onto consumers or both.

As profit margins fell, retailers were more hesitant to hire new employees.

The CU Boulder report said it had a weak outlook for retail jobs in Colorado due to the higher costs impacting both businesses and their customers. If trade disputes have fully settled, economists expect business to pick up again next year.

TOURISM

While some industries are expected to pick up next year, one industry is joining the trend of job losses: leisure and hospitality.

Most tourism metrics like visitor spending, tax revenue and airport traffic have stayed flat, said the statewide economic report. But hotel occupancy and rates have fallen in 2025.

Many event-dependent businesses could be affected by declines due to a rise in price-sensitive customers.

Colorado occupancy rates have dropped between January and September by 1.3% compared to the same time as last year, according to Smith Travel Research. Revenue per room fell to less than $110 in 2025, compared to almost $113 in 2024.

Denver International Airport saw a slight decline in travelers in August 2025, down by 0.4%.

Colorado also saw fewer international travelers in 2025 due to federal policy changes. International travel is expected to fall by 5% by year’s end, the report said. Though Colorado is faring better than other states, where many are expected to see an 8% to 10% drop in international travel.