Phil Castle, The Business Times
Diane Schwenke considers a lot of factors in tracking business conditions in the Grand Valley, among them labor estimates, tax collections and housing starts.
But Schwenke also considers the anecdotal information she gathers from the business owners and managers with which she talks nearly every day and what she hears when she poses the same question: How’s business?
“These days, the answer is usually ‘Really good’ or ‘I’m so busy I can hardly keep up,’” says Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce.
Those kinds of responses have Schwenke looking at the proverbial glass as half full. “Conditions are better, and the glass is half full. I also see this uptick continuing throughout 2018 with nothing on the horizon at this point in time that could negatively impact our continued growth.”
Schwenke isn’t alone in her upbeat outlook, either. Other reviews for the first half of 2018 come in mostly glowing with expectations for more of the same during the second half of the year.
Scott Fasken, vice president of the Colorado Document Security onsite document destruction business based in the Grand Valley, put it this way: “Oh, it is even a bigger glass. We see a strong growth in work.”
Schwenke, Fasken and others point to such diverging trends as lower unemployment rates and higher payrolls as well as lower housing inventories and higher real estate sales. The other trend they cite is the growing migration of people into Mesa County, many of them from Denver and the Front Range.
“We have also seen a large amount of job seeekrs coming in from out of the area looking for work in Mesa County,” says Curtis Englehart, director of the Mesa County Workforce Center in Grand Junction. “Some have even chosen to move here first and then look for a job. That is a trend we have not seen in Mesa County over the last 10 years.”
Robert Bray, chief executive officer of Bray Real Estate in Grand Junction, says the movement also affects real estate markets. “One factor playing a bigger role in real estate activity with each passing month is the numbers of people coming from the Front Range, some with jobs and most not. I think they’ve had enough of big city congestion.”
An increasing number of companies also are relocating to Mesa County or considering the move, says Robin Brown, executive director of the Grand Junction Economic Partnership. While the economic development organization was working with five to 10 prospects in January, that number now totals 30, Brown says, most of the businesses that first reached out to GJEP.
Labor estimates constitute one of the most closely followed economic indicators, and in Mesa County reflect improving conditions.
For April, the latest month for which estimates are available from the Colorado Department of Labor and Employment, the seasonal adjusted unemployment rate fell seven-tenths of a point to 3.3 percent even as the labor force rose 176 to 75,093.
Meanwhile, 730 job orders were posted at the Mesa County Workforce Center, a 16 percent increase over the same month last year.
“From a work force standpoint, you can look at three data points to get a general idea of where a local economy is at: unemployment rate, labor force and job orders. All three are trending in the right direction,” Englehart says.
The last time the Mesa County labor force topped 75,000, the jobless rate topped 8 percent, he says.
“I will also add that our local economy has really started to diversify over the last several years,” he says. “ Example: Oil and gas is still a key industry in Mesa County. However, that specific industry is still nowhere near where it was 10 or 11 years ago. However, we are still seeing positive trends in our local economy. That is one of many signs showing local economic diversification.”
Schwenke agrees. “One of the reasons that I am so bullish on the economy right now is the fact that we appear to be firing on all cylinders. The demand for employees are for positions in all industries — health care, retail, construction and energy — which indicates to me that we are succeeding at diversifying the economy. There is still much work to do, but we are on the right trajectory.”
Given the trends, Englehart said he expects the jobless rate to move even lower even as the labor force continues to grow. “I am really excited to see the trend 2018 has started to continue throughout the year.”
Sales tax collections, a measure of retail activity, have increased in the Grand Valley. Mesa County reported collecting nearly $2.7 million in sales taxes in April, a 7.8 percent increase over what was collected during the same month last year. The City of Grand Junction collected almost $4.2 million in sales taxes in April, a 10.2 percent on a year-over-year basis.
Jodi Romero, finance director for the city, says sales tax collections reflect a strengthening and growing economy. “Clearly, it’s all positive.”
Schwenke says the passage last year of ballot measures to increase funding for public safety and Mesa County School District 51 reflects in part increasing confidence. “If you are worried about your next paycheck, you do not tend to vote to raise taxes. If that worry is not as prevalent, you tend to look toward the needs of the community and building for the future.”
Real estate activity offers yet another indicator of economic conditions.
For April, 518 real estate transactions worth a combined $138 million were reported in Mesa County. Compared to the same month a year ago, transactions rose 15.9 percent and dollar volume jumped 30.6 percent. At that pace, 2018 could rank among the top years for the local market.
The inventory of existing homes on the market remains low — the 823 active listings at the end of April constituted only a two-month supply. The pace of new home construction has increased, though. For April, 86 building permits for single family homes were issued in Mesa County, a 59 percent increase over the same month last year.
Bray says he initially believed low inventories could slow residential real estate activity. The potential for higher mortgage interest rates also could present a headwind.
“I think to sustain our economy we need to see continued increase in employment numbers, and incomes will have to keep up with rising prices. Rising sales tax collections are certainly an indicator of improving consumer confidence.”
Bray remains optimistic overall. “At the moment, I see nothing in the way of a very good second half of 2018.”
Dale Beede, a senior broker associate with Coldwell Banker Commercial Prime Properties in Grand Junction, says commercial real estate activity also has increased.
Beede says his firm sold or leased about 500,000 square feet of warehouse and shop space over the past year while vacancies in industrial spaces decreased.
Retail sales and leases will grow dramatically over the next two years, he says, even as new commercial and industrial buildings are constructed to meet heavy demand.
Grand Junction has attracted the attention of retailers, Beede says, while the engineering degree programs offered at Colorado Mesa University will help to bring larger engineering and information technology firms to the Grand Valley.
Brown says the Grand Valley remains well-positioned to take advantage of what’s been a shift in population and businesses from urban areas to rural areas that offer lower costs and better lifestyles. The Grand Valley offers interstate highway and rail access, a regional airport and a growing university, she says.
Schwenke expects the Grand Valley to attract people, including retirees, and businesses. “We are seeing an in-migration of residents from Denver. As housing and overall cost of living increases in the metro area, a trend we saw developing last year of retiring boomers moving into Grand Junction will accelerate, and I think that business expansions from the Denver metro area are not far behind.”
Fasken says the various economic indicators and trends play out in his business to shred documents and help customers comply with federal and state laws that require them to protect confidential information. Colorado Document Security operates shredding trucks that serve Colorado as well as parts of New Mexico, Utah and Wyoming.
“Our business is up. Our local work is strong in all sectors of clients,” he says.
When he needed to hire a new employee, it took longer because of the shallower labor pool from which to draw, Fasken says.
As for the remainder of 2018, Fasken sees a proverbial glass that’s not only half full, but getting bigger. “We see nothing slowing the economy.”