Peek performance: Business leaders share outlook for 2017
Phil Castle, The Business Times
The outlook for the year ahead depends on who you ask. But if there’s a consensus among business leaders in the Grand Valley, it’s that they’re optimistic. Moreover, they’re ready to drop the cautiously part of their assessment.
“I’m really optimistic,” says Dale Beede, a broker associate with Coldwell Commercial Prime Properties in Grand Junction.
In fact, Beede says he’s more excited about the prospects for commercial real estate going into this year than he has been for years as he anticipates businesses large and small expanding — and leasing and buying new quarters as they do. While ample inventory remains for commercial and industrial use, there also could be some new retail construction.
Beede and others say election results seem to have inspired more confidence. Vance Wagner, regional president of ANB Bank, says business owners and managers are ready to go from just talking about expanding operations or buying equipment to actually following through on their intentions.
Kristi Pollard, executive director of the Grand Junction Economic Partnership, expects to build on what she describes as momentum in bringing new businesses and jobs to the Grand Valley. “We are so encouraged about 2017.”
While challenges remain — including an economy that’s stubbornly lagged behind other areas of Colorado in fully rebounding from the recession — a number of collaborative efforts are under way to improve conditions. That includes initiatives to accelerate the growth of business startups, establish a foreign trade zone and bring more commercial air service to the Grand Valley.
Curtis Englehart, director of the Mesa County Workforce Center in Grand Junction, says he expects the labor market to continue to improve even as work continues to more accurately quantify the labor force and connect a more direct pipeline between the labor pool and employers filing positions.
Jon Maraschin, executive director of the Business Incubator Center in Grand Junction, says activity has picked up there as entrepreneurs seek assistance in starting and expanding their ventures. “It’s hard not to be optimistic.”
Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce, agrees in making an emphatic choice among better, worse or the same. “I think 2017 is going to be much better than 2016.”
Several Grand Valley business leaders say they’ve noticed a growing sense of optimism among local business owners and managers, especially since the general election in November.
Schwenke says it remains to be seen whether a Donald Trump administration ultimately will be good or bad for business. But there’s an expectation for now Trump’s election portends corporate tax cuts, regulatory reforms and a friendlier environment for the energy industry and business in general.
There are signs of growth in a number of industry sectors, Schwenke said, including construction with work on assisted-living and rehabilitation facilities in the Grand Valley. Manufacturing has remained steady, although there are questions about how the Trump presidency could affect exporting. The energy sector could be rebounding from downturn in commodity prices.
Meanwhile, more retirees are moving to the Grand Valley, many of them from the Front Range, Schwenke says. They’re selling their homes on the Front Range for substantial gains and building new homes in the Grand Valley, she says.
Beede says he looks for continued growth in commercial real estate as businesses expand and seek larger quarters — leasing, buying or in some cases constructing new buildings.
Wagner says an increase in lending activity constitutes a leading indicator of subsequent business expansion. Local banks remain healthy and loan delinquency rates are down, he says.
Pollard says she’s “giddy” about the prospects for economic development in Mesa County in 2017 as years of work begin to pay off in bringing new businesses and jobs to the area.
GJEP has focused on the outdoor manufacturing industry because it constitutes a natural fit with the recreational opportunities available in the Grand Valley, Pollard says. “We live in this beautiful playground. It’s really not a difficult sell once we get in front of the right people.”
But there’s also potential for high-tech firms, Pollard says, including software development companies.
The Rural Jump-Start Program will continue to play a role in establishing new companies in Mesa County, Pollard says. The program creates zones in which approved businesses are exempted from paying state and local taxes. To participate, the core functions of businesses may not compete with existing operations. Businesses also must create a minimum of five net new jobs in the county in which they’re located.
Seven companies were approved to participate in the program in Mesa County in 2016, and Pollard expects more to be approved in 2017.
Pollard says she also excited about other efforts in which GJEP and the Grand Junction Area Chamber of Commerce are involved, including a proposal to establish a foreign trade zone in Mesa County.
A federal program allows for the establishment of secure areas within the United States that are considered outside of U.S. Customs territory for tariff purposes. Businesses are allowed to import goods without paying a duty until those goods leave the zone and enter U.S. commerce. When imported materials and components are used to make finished products, duties can be assessed at what’s often a lower rate applied to those products. When merchandise is exported from the zone, no duties are assessed. Pollard says there’s interest among local businesses in establishing a zone and taking advantage of reduced tariffs and paperwork. A foreign trade zone also could help in recruiting new businesses to the area.
GJEP and the chamber also are involved in efforts to bring more commercial air service to the Grand Valley, including direct flights to and from Los Angeles.
While the labor force in Mesa County has yet to return to pre-recession levels, labor conditions should continue to improve in 2017, Englehart says.
For November, the latest month for which estimates are available, the unemployment rate in Mesa County retreated another two-tenths of a point to 4.3 percent. The overall labor force stood at 73,191. Compared to November 2015, the jobless rate has dropped six-tenths of a point and the labor force has grown 912.
In additional to seasonal hiring for temporary jobs, there’s been more hiring for permanent positions, Englehart says.
The number of job orders posted at the Mesa County Workforce Center also has increased, he says, another sign of increasing labor demand.
Englehart says he has high hopes for a number of initiatives at the workforce center, including the Work Ready Communities Program to better match businesses looking for employees and people looking for jobs. Profiling helps businesses determine what training and skills are needed for a given position. Career-ready testing offers a measure of the knowledge and skills of an applicant. Another initiative promotes work force development through apprenticeships.
Meanwhile at the Business Incubator Center, call volume and other measures of activity have increased, Maraschin says. There’s a lot of interest from entrepreneurs on the Front Range interested in relocating or starting ventures in the Grand Valley.
Maraschin expects a new initiative at the center to accelerate the growth of new ventures in putting participants through a program that takes six months rather than years. The program includes the Leading Edge business planning course as well as the additional instruction, counseling and other resources offered at the center. Maraschin expects four to six businesses to go through the fast-track program at a time.
Additional efforts at the center focus on promoting the agricultural sector in Mesa County and helping local producers get their products to kitchens and restaurants, he says.