Colorado’s $14.2 billion aerospace industry, long considered one of the strongest in the nation, continues to have an outsized concentration of jobs as compared to other states but also faces increasing pressure from competitor states that government leaders need to address, according to a new report.
The competitive assessment, commissioned by the Colorado Chamber Foundation and performed by strategic planning firm Economic Leadership, notes that while the industry supports more than 61,000 direct jobs, growth has slowed as competitor states pursue company expansions. It recommends 18 strategies for keeping Colorado at the top of the national sector, arguing the state must reinforce its commitment to the industry and make it easier for aerospace and defense companies to do business here.
Rachel Beck, Colorado Chamber Foundation executive director, said the report should serve both as a validation of the continued strengths that the state aerospace sector boasts and as a wakeup call that it must do more to maintain that position. The business atmosphere is suffering from some of the same conditions that plague industries statewide — including the rising cost of doing business, skyrocketing housing costs and increasing regulations — but also could use a marketing boost from top state leaders, she said.
“The good news is we begin from a position of leadership. Stakeholders believe that the state remains a globally significant hub for aerospace and defense because of our highly educated workforce and an end-to-end ecosystem that encompasses everything from research to manufacturing to software and satellite development,” Beck said.
“However, stakeholders also say the industry is being taken for granted and the state is coasting on momentum, warning that the state’s historical advantages are dissipating and that the state’s climate as a great place to do business has eroded,” she added.
Significant jobs, but growth has slowed
Colorado ranks 13th in overall aerospace employment, but its concentration of aerospace jobs — a statistic indicating that an industry encompasses a larger share of a state’s economy than the national average — is higher than its competitor states in the sector. Partly because of that, every job in the industry, which pays average annual wages and benefits totaling $179,500, supports two jobs in other sectors from healthcare to professional services to accommodation and food services, the report stated.
Between 2019 and 2025, aerospace added 9,334 jobs in Colorado — an 18% growth that trailed only three other sectors during that time. However, when compared to other states, the 14.4% aerospace-industry job growth ranked slightly below average at 26th, as more states began to offer incentives and other perks to attract the high-dollar work and Colorado’s advantages began to ebb, the report stated.
In fact, the state lost 171 net aerospace jobs in 2025, a mere 0.3% decline but a number that is stark compared to the growth of the years before it. And the core manufacturing subsector — the segment most associated with the traditional production of aircraft, missiles and military vehicles — recorded a 4.3% loss of jobs last year, a partial reason why the state ranked only 37th in job growth in this key area over the past five years.
The Apollo 7 rocket is on display at Florida’s Kennedy Space Center.
What’s eating the aerospace sector
Interviews and surveys done with more than 50 local sector leaders at both large and small firms found that Colorado still benefits from its “end-to-end” ecosystem, allowing for more efficient supply pipelines and a large pool of talent from which companies can hire. A dynamic and collaborative industry culture, high quality of life and large federal presence — despite the ongoing relocation of U.S. Space Command from Colorado to Alabama — also bolster it, Economic Leadership economists found.
However, the rising costs of living and doing business in Colorado have combined with what respondents call a weak marketing of the state’s strengths and a fragile talent pipeline to leave it vulnerable to aggressive recruitment of expansions by peer states. And that should serve as a red flag to the possibility of more job losses if there’s not a quick change in state attitudes and policies needed to reverse course, industry leaders said.
“If this doesn’t happen in the next two to three years, it’s gone,” one industry leader told Economic Leadership researchers about Colorado’s position as a national aerospace leader. “It’s now, or we will just get picked apart slowly by every other state that is going after these high-paying jobs.”
The recommendations made by the report fall into four primary buckets.
How to help the aerospace industry
First, the state must reinforce its commitment to the aerospace industry, starting with the establishment of a coordinated brand for aerospace and defense marketing to send signals to the national industry why Colorado is still such a key state. It also needs to increase the direct gubernatorial involvement in major recruitment and retention deals as other states have done and to look at creating a governor’s office or special-purpose entity to boost the industry in Colorado, the report recommended.
Second, it must become easier for aerospace and defense companies to work through the sometimes-labyrinthine permitting system to get to approvals they need to launch and grow here, the report states. Colorado should streamline and coordinate state and local permitting for aerospace facilities and projects, should fund a program to create move-in-ready sites for sector companies and should expand shared access to classified facilities for small businesses.
Third, the state needs to take several steps to improve its competitiveness for aerospace and defense attraction and investment, starting with expansion of state incentives for these companies, the report recommended. It also must strengthen its support for existing businesses, pursue regional coalitions with neighboring states to bring in more investment and adopt a targeted aerospace and defense tax credit to match incentives in competitor states, the report added.
Finally, Colorado must build, attract and retain more talent to support continued sector growth — both via workforce-training strategies and through efforts to address housing affordability in key aerospace and defense employment hubs. Some ways to do this include expanding dual-enrollment and apprenticeship pipelines for aerospace technicians, strengthening skills-training partnerships between employers and community colleges and preparing for a surge in national-security and radar-technology contracts.
“It matters to all of us”
Rachel Beck is executive director of the Colorado Chamber Foundation.
The state already has taken a major step toward meeting that last group of suggestions. In August, the Colorado Space Institute at Arapahoe Community College was named one of seven national NASA Space Hubs and awarded $1.3 million to work with schools and employers to create new pathways for training welders, electricians and other technicians to work in the sector.
Beck emphasized that with the importance of the aerospace sector to the greater Colorado ecosystem, even business leaders and residents who may not have a direct connection to the industry should take notice and call for the state to make recommended changes. Such moves will boost employers well beyond just industry leaders like Lockheed Martin, United Launch Alliance and Northrop Grumman that employ thousands of Coloradans.
“Because aerospace makes up so much of our economy and supports so many other jobs, it matters to all of us,” Beck said. “And there are a lot of steps we can take immediately to protect the industry and to grow the industry.”