Very few people might remember what a recession is like. While some consider COVID a recession, it was more of an economic downturn. While that period was bad, the economy returned much quicker than anticipated. The last actual recession was 2008-2010.

Colorado’s saving grace back then was its energy sector—particularly the oil and gas industry—which was still growing in the state and provided a significant amount of revenue to state and local coffers. Economic activity, job creation and an infusion of revenue from oil and gas acted as the “rising tide that lifts all ships,” allowing Colorado to withstand the economic downturn better than many other states.

That period demonstrated the importance of having a diverse economy and a strong “base industry” sector, such as oil and gas production. “Base industries,” like oil and gas, function as “drivers” of local and state economies by providing essential goods for our state and nation. Since they are necessary, businesses in this sector might contract during a recession, but rarely close. Typical base industries include manufacturing, construction, freight transportation (trucking and rail), farming, ranching, oil and gas, mining, and food production (think JBS in Greeley). These businesses also tend to pay above the state median wage and offer good benefits.

If, as some predict, a recession does occur, it’s unlikely that the oil and gas sector could perform a similar role of shouldering the load and prop up Colorado’s economy as it did from 2008 to 2010. On the state and local level, a spate of new rules, regulations, laws, and additional fees have increased costs and added uncertainty about the future of Colorado’s oil and gas industry. This has resulted in the migration of a number of energy-related businesses to other states. According to the Colorado Common Sense Institute, Colorado has lost almost 31,000 jobs in the energy sector since 2010.

Since the last recession, Colorado has moved more toward a service-based economy where tourism, entertainment, health care, information technology and various others are more prominent. When the economy is doing well, these businesses contribute greatly to the state in generating jobs, economic activity and tax revenue, but they also are generally the first and hardest hit when a recession occurs. Services might enhance business and provide color and enjoyment to our lives, but they are not critical to our well-being.

A worker going to the office can forgo picking up a latte at Starbucks and instead bring a cup of coffee from home. People choose to take staycations and visit sites near their home rather than shell out money to take a weeklong vacation at a resort in the state.

Families cut their recreational and entertainment expenses as many can ill-afford to pay the price of lift tickets or spend money on expensive sports events and concerts. Parents choose to have family meals at home rather than spend $100 or more at a restaurant. Businesses reduce staff, forego upgrading software, cut out perks for staff, such as bringing in lunch, and cancel meetings and work retreats at one of our state resorts.

With an economy that has become more heavily dependent on service-related industries, Colorado might experience a more serious jolt to its economy in the case of a recession than our surrounding states, which have a stronger base industry sector.

While there are base industries in Colorado that have experienced significant growth since 2010, even these might represent a cause for concern based on recent trends.

The craft beer industry is one that has witnessed substantial growth. In 2010, there were approximately 150 breweries in the state. That sector now has over 450 breweries (a 300% increase since 2010) and, according to the Craft Brewing Council of Colorado, this industry employs 63,000 people across the state. It generates $12.7 billion in economic activity. While this sector has been a bright spot since the last recession, its luster has started to fade, and we have seen 140 breweries close since the pandemic, with 35 closing in 2023 and 41 in 2024.

Regarding attracting and retaining base industries, Colorado is at a greater disadvantage than it was at the end of the last recession. A key bellwether as to a state’s attractiveness is how chief executives and senior management of companies view the state. A good gauge of this sentiment is the Best and Worst States for Business, an annual survey conducted by Chief Executive magazine of over 650 CEOs and major company owners across the nation. Colorado was ranked the eighth best state for business in 2010. This year, our state ranked 33rd.

The decline — one of the steepest in the country — can be traced to several factors that business leaders consider when establishing or relocating a business. A major priority for senior executives is stability and predictability in the regulatory environment. Over the past number of years, Colorado’s regulatory environment has been anything but stable. Further our future regulatory environment is less than predictable and based on the last several legislative sessions businesses can expect pressure on lawmakers for even more regulation.

Another major consideration is a state’s tax and fee environment. While the Taxpayer’s Bill of Rights (TABOR) has kept state income and sales taxes unchanged, the same cannot be said about fees. Since the passage of TABOR, we have seen a plethora of fees adopted on various services and products, which have had a chilling effect on business. According to the Colorado Common Sense Institute, the state collected $742 million in enterprise fees in 1994, when TABOR took effect. By 2023, that amount totaled $23.3 billion (an increase of over 3,000%). Whether we call it a tax or a fee, the levy on Colorado businesses does not seem to be abating. Since many base industries have small profit margins and compete on a regional and national basis, they are impacted more greatly by increases in state and local taxes and fees than other sectors.

In deciding where to locate their business, infrastructure represents a major factor for CEOs in almost all businesses but even more so for base industries. Base industries like manufacturing, mining, freight transportation and agriculture depend on highway and rail access to receive raw materials or products and ship their goods to other areas. Many of these businesses convey time-sensitive products and depend on an efficient and well-maintained transportation network. Unfortunately, Colorado’s transportation system has not kept up in meeting the additional demands of a growing population nor being able to maintain its existing system. According to a 2025 report by TRIP, a national transportation group, traffic congestion and gridlock costs Colorado drivers $11.4 billion each year.

Colorado’s roadway pavement conditions, which now rank 43rd in the nation, exacerbate the problem. Congestion, poor pavement and deficient bridges add to travel costs for business as drivers might need to take alternate corridors due to the condition of certain bridges or roadways. Those costs are directly passed on to shippers and companies in our state, constituting an additional hidden cost that is not lost on many company executives.

A final and all-important consideration for CEOs of base industries is an adequate workforce to meet their needs. Base industries generally employ blue-collar workers. To attract and retain those workers, the environment must be one that is affordable for those individuals to support their families. Skyrocketing home prices and property taxes, along with an overall higher cost of living in the state compared to surrounding states and the likes of Texas, are making it much more challenging to attract and retain key blue-collar workers. These critical workers can obtain similar pay in others states where they can afford a home and live more comfortably in an area with a lower cost of living.

During COVID, our state government touted the value and importance of base industries and the employees working in those industries. They recognized these businesses as essential and critical to our economy and well-being as a nation.

One would hope that our state and local government officials and elected leaders might appreciate that these same businesses, and their employees might be even more critical to our economy today in the case of another recession.

Greg Fulton is the president of the Colorado Motor Carriers Association, which represents over 600 companies directly involved in, and affiliated with trucking in Colorado.