What’s next? Indicators point to recovery, but uncertainty persists
Phil Castle, The Business Times
While indicators point to generally improving economic conditions in Mesa County, Diane Schwenke isn’t celebrating — at least for the time being.
Many of the business owners with which Schwenke talks nearly every day tell her they’re concerned about sales as well as the potential effects of federal health care legislation and pending regulations. Throw in the uncertainty associated with a presidential election year, and Schwenke says it’s understandable owners remain reluctant to increase staff or expand operations.
“It’s not time to throw the party yet,” says Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce.
Nonetheless, increases in everything from payrolls to real estate transactions to building permits to retail sales create an encouraging statistical snapshot, says Kelly Flenniken, executive director of the Grand Junction Economic Partnership. “It’s such a prettier picture than it was four years ago.”
In fact, it’s a prettier picture than even a year ago.
At 9.3. percent, the latest monthly unemployment rate in Mesa County remains a full point above the state and national jobless rates. However, both payrolls and the overall labor force have grown in the county over the past year. Payrolls have increased 2,947, even as the labor force has increased 2,885.
Suzie Miller, business services manager at the Mesa County Workforce Center in Grand Junction, estimates the county has regained about 5,600 of the nearly 12,800 jobs lost since peak employment before the recession.
There’s even a silver lining to higher unemployment rates, Flenniken says, in that a deeper labor pool is more attractive to businesses considering relocating or expanding in Mesa County.
The real estate market also has rebounded over the past year. A total of 1,943 real estate transactions worth a collective $380.4 million were reported in the county through the first seven months of 2012. Those numbers constitute a year-over-year increase of 11 percent in sales and 10 percent in dollar volume.
A total of 239 building permits for new construction were reported for Mesa County and Grand Junction from January through July, an increase of 28 percent over the same span last year.
The pace of sales tax collections, an indicator of retail sales, has slowed in Mesa County and Grand Junction in recent months. Still, tax collections so far in 2012 outpace those in 2011. Lodging tax collections, a measure of hotel and motel stays, are up 6.1 percent so far this year over last year.
Flenniken says she doesn’t track any single indicator, but considers their cumulative effects. “Everything I look at is going in a positive direction.”
While Mesa County hasn’t yet fully recovered from the recession, neither is it heading for another downturn anytime soon, she says.
The fact that new restaurants and stores are opening in the area constitutes a sign the owners of those ventures are more confident in their outlooks, she adds. “That’s a pretty good indicator.”
The economy remains a challenge overall in recruiting companies to relocate to Mesa County, but Flenniken says there’s been good activity among prospects.
GJEP has taken a more deliberate approach in its recruitment efforts as well as enlisted local business leaders to serve as ambassadors in representing Mesa County, Flenniken says. Even a casual conversation on an airplane flight could spark interest in bringing a company to the area, she adds. “Absolutely that can happen.”
Schwenke says Mesa County has historically lagged behind other areas of Colorado and the United States in entering into recessions and then recovering from them. So more robust growth in those other areas could follow here, she says. “I think we’re just kind of starting to see some of that activity in the Grand Valley.”
At the same time, though, Schwenke still sees the economic indicators as mixed. Uncertainty persists as business owners and managers wait for the outcome of the election and the effects of federal health care legislation and other regulations. In the meantime, businesses continue to operate with smaller staffs and put off expansions, she says.
The latest results of the chamber’s twice-annual survey reflects a more upbeat outlook, but also the expectation it still could take a while for the economy to fully recover, Schwenke says.
Of the 304 chamber members responding to the spring survey, 34 percent said they’re more upbeat now about economic conditions than they were six months ago — a 10-point jump from the fall survey.
While 42 percent of respondents to the spring survey expect the Grand Valley economy to significantly recover in 2013, another 20 percent don’t expect recovery until 2014.
“We’ll be in this holding pattern for a while,” Schwenke says.