Phil Castle, The Business Times
Diane Schwenke follows the economic indicators, among them building permits, sales tax collections and unemployment rates. She also interacts nearly every day with small business owners and managers.
Based on what she gleans from numerical and anecdotal information, Schwenke believes 2020 will be another good year for business in the Grand Valley. But she tempers that optimism with concerns about the uncertainty associated with a presidential election year, increasing regulations and labor shortages.
“I think 2020 in the Grand Valley will still be a good year for area businesses, but the growth rate will be moderated based on uncertainty about the future and increased regulations for businesses with employees,” says Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce.
Schwenke isn’t alone in offering something of a mixed forecast for the coming year. Four other Grand Valley business leaders shared similar expectations in answering questions posed by the Business Times.
“My best guess is 2020 will provide a rather good, healthy climate for business, understanding that any business needs to be more in tune with the needs of their customer whether offering products or services,” says Robert Bray, chief executive officer of Bray Real Estate in Grand Junction.
Jon Maraschin, executive director of the Business Incubator Center in Grand Junction, says he expects business conditions to continue to improve, but even success could pose challenges. “The more success that our valley sees, the harder it is going to be to keep the things that make us special.”
The five leaders all say they anticipate 2020 will be a good year for Grand Valley businesses — and in the case of Curtis Englehart, also a good year for the local labor market.
“I am optimistic that our labor force will continue to grow to help support the employer demand we are seeing in filling their vacancies,” says Englehart, director of the Mesa County Workforce Center in Grand Junction.
While the health care and energy sectors continue to play leading roles in the local economy, job growth has occurred in most sectors, Englehart says. Since 2014, Mesa County has gained more than 3,3300 jobs. Since 2017, the number of people in the local labor force has increased more than 8,000. “These are pretty remarkable numbers that we are seeing in Mesa County. I hope this is a trend that we will continue to see going forward.”
For October 2019, the seasonally unadjusted unemployment rate stood at 2.8 percent in Mesa County. That’s up three-tenths of a percent from September, when the jobless rate dropped to the lowest level in Mesa County for county level statistics going back to 1990.
Englehart says he expects a seasonal spike in the monthly jobless rate early in 2020, but then a downward trend similar to what happened in 2019.
Real estate activity remains near the levels for 2018, the best year for the Mesa County real estate market in more than a decade.
While low interest rates on mortgages constitute a tailwind, shrinking housing inventories and higher prices present headwinds, Bray says. “The last several years of low inventory, attractive interest rates, a flattening transaction base, inadequate new home inventory, rising prices are becoming the new norm.”
Dale Beede, a broker associate with Coldwell Banker Commercial Prime Properties in Grand Junction, says he anticipates new commercial development in both medical office and retail construction. There also could be some new professional office buildings and possibly new manufacturing and warehouse facilities.
An increase in development and transportation fees poses higher costs, however, he says.
Growth in such sectors as outdoor recreation and technology should continue through 2020 and beyond, Beede says. “We will, hopefully, see some announcements in 2020 of new companies locating to our area.”
“Fortunately, our valley’s economy is more diverse than ever,” Beede adds. “We should have little trouble continuing to grow this economy for another year or two.”
Other business leaders also cited an increasingly diverse local economy as a benefit that positions the Grand Valley for additional growth.
“Additionally, we are seeing the handing off of local businesses to a second or third generation of younger business leaders that have innovative and energetic concepts of how to do business,” Schwenke says. “It’s pretty darn exciting, and I definitely think it is for the better.”
Maraschin says there’s been growth in advanced manufacturing and technology as well as tourism. The addition of hemp and cannabidiol has changed agriculture.
As director of an organization and facility that helps people start and grow businesses, Maraschin says he’s also optimistic about the prospects for entrepreneurship and startups. “We have strong governmental support, evolving infrastructure, low-cost work force relatively, great technology tools.”
Maraschin adds Colorado Mesa University and the local lifestyle to the list of attributes. “CMU gets more awesome every day, and our valley is the Colorado that people want to be in.”
But success also presents challenges, Maaraschin says. “Our highly successful businesses and startups are now targets of other communities for recruitment, and there will be leakage. Now is the time to double down on strategic economic development and continue to start, grow, recruit and retain businesses that fit thin our amazing community.”
The uncertainty associated with a presidential election also could present challenges in 2020, local business leaders say.
Bray says presidential elections tend to come with distractions that can make a measurable difference.
Schwenke agrees. “Businesses making plans for the future hate uncertainty in the public arena, and I do believe that will dampen business investments in capital projects and jobs for much of the year.”
Trade tariffs, the potential for the impeachment of President Donald Trump, the cost of health care and increasing national debt also raise concerns.
Schwenke says a survey of chamber members revealed some of the things that keep them up a night, including a shortage of qualified workers, rising health insurance premiums and the overall direction of state government.
Business conditions could suffer in 2020 under increasing state regulations, Schwenke says, including employer mandates, destination sourcing sales tax collections and another increase in minimum wages.
Oil and natural gas exploration and production could slow as a result of new state legislation and rules. The health care sector could be affected if a proposed state-operated public insurance option is created and caps on reimbursement rates to health care providers are instituted, she says.
Still, local business leaders say the Grand Valley remains an attractive place in which to live, work and conduct business. That bodes well for 2020 and beyond.
“We’re still the greatest place in Colorado in which to live, to work and to raise a family,” Beede says.