Labor gains ahead? While pace will be slow, observers foresee job growth
Phil Castle, The Business Times
Suzie Miller cites a number of statistical trends she believes reflect improving labor conditions in Mesa County. But one sure sign of better times, she says, is the return of an annual job fair, an event that will feature 40 companies looking to fill actual openings, not just collect applications and resumes.
As business services manager at the Mesa County Workforce Center in Grand Junction, Miller is involved in organizing what’s billed as the Jump Start Job Fair on Jan. 31. She’s also uniquely positioned to track labor trends on an ongoing basis.
The results of a recent national study conducted for the U.S. Conference of Mayors suggests Mesa County won’t regain jobs lost in the recession for another five years. But Miller says the rapid growth brought on by an energy boom preceding the bust wasn’t sustainable anyway.
She foresees a pace of growth that’s slower, but ultimately better for the economy.
“Slow and steady often wins the race.”
Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce, draws a similar analogy in assessing prospects for job growth. “I think we’re out of the starting gate. But I don’t think we’ve made the first turn yet.”
Kelly Flenniken, executive director of the Grand Junction Economic Partnership, also expects progress to be slow. “We’re not going to fly out of a recession. We’re going to have to dig and scrape our way out.”
At the same time, though, Flenniken says she senses a more upbeat outlook. “I just feel some optimism. I just feel that things are ready to break in a good way.”
A study conducted by IHS Global Insight for the U.S. Conference of Mayors includes Mesa County among 80 metropolitan areas across the country that likely won’t recover jobs lost in the recession until 2017 or later.
Mesa County is expected to regain almost 24 percent of the jobs lost during the recession by the end of this year, but then take another five years or more to regain the remaining 76 percent of jobs.
According to the results of the study, work forces in only 26 out of 363 metropolitan areas nationwide have rebounded from the recession, while another 99 metro areas have recouped half their losses.
In Colorado, Pueblo and the Fort Collins and Loveland area already have recovered jobs lost in the recession. Boulder and the Denver and Aurora area have recouped about half of job losses. Colorado Springs and Greeley have regained about a third of lost jobs.
According to the study, employment peaked in Mesa County at 66,500 prior to the recession and fell to a low of 57,100, a drop of almost 16.5 percent. Employment is expected to rebound to 59,300 by the end of the year.
According to estimates from the Colorado Department of Labor, however, nonfarm wage and salary payrolls topped 80,000 in July 2008 and again in September and October of that year. Payrolls fell to just over 68,000 in June 2011. That’s a loss of 12,000 jobs and a proportional decline of 17.6 percent. As of November 2011, payrolls had climbed back to 71,401, regaining more than 28 percent of the difference between the peak and valley in the work force.
Miller, Schwenke and Flenniken all say there’s a big difference between what’s happened in Mesa County and other metropolitan areas in the country. Prior to the downturn, Mesa County experienced one of the fastest growing work forces in the country, gains bolstered by an increase in natural gas exploration and production in Western Colorado. As monthly unemployment rates dropped below 4 percent and drained the pool of available labor, the Mesa County Workforce Center began recruiting workers from other states, Miller recalls.
“We were growing at a rate we couldn’t sustain.”
Having soared higher than other areas of the country, the Mesa County labor market subsequently fell further in the aftermath of a double whammy of sharply lower energy activity and the full effects of economic recession.
Declining incomes and a downturn in the housing market, factors cited in the IHS Global Insight study as affecting recovery in metro areas, have been pronounced in Mesa County. According to the study, the median annual household income fell from $55,700 in 2008 to $46,200 in 2010, a decline of more than 20 percent. The median sales price of existing homes dropped from $183,400 in the fourth quarter of 2010 to $165,295 in the fourth quarter of 2011, a drop of more than 18 percent.
Miller and Flenniken say that because Mesa County was late in entering the recession, it likely will lag behind other metro areas in fully recovering.
But there are signs of recovery. In addition to increases in payrolls, Miller points to growing labor demand as measured by the number of job orders posted at the Mesa County Workforce Center.
A total of 2,744 job orders were posted at the center during 2011, almost 60 percent more than in 2009 and slightly ahead of 2008, Miller says. Each order usually involves two or three job openings, sometimes more. There’s actually a shortage of qualified job applicants in some sectors, she says, in particular experienced machinists who can work for local manufacturers.
Miller expects job growth to continue in Mesa County at a slow, but steady, pace. While that growth won’t come close to matching what occurred prior to the recession, Miller sees that as a good thing. “What we’re doing, hopefully, is growth within what our business demands are.”
Flenniken says a downturn in the labor market constitutes something of a double-edged sword when it comes to economic development because labor availability helps in recruiting businesses to locate in the area. As the national economy improves, she expects economic development activity to increase. “Companies are moving and doing things.”
The Grand Junction Economic Partnership has taken a more proactive approach to economic development in working with GJEP board members and other local business leaders to tap their connections. While it’s still too early to tell how the approach will work, Flenniken says she’s optimistic.
Meanwhile, existing businesses that survived the recession by operating more efficiently are now poised to take advantage of increasing demand, she adds.
Schwenke also expects improving business conditions in Mesa County, albeit at a slow pace.
She bases her outlook in part on the latest results of a chamber survey. While 51 percent of business owners and managers responding to the survey expect the local economy to begin to recover in 2012 or 2013, 22 percent expect it could take until 2014 or later. “We’re still very early in the race.”