Phil Castle, The Business Times
Business owners and managers remain cautiously optimistic in their outlook for the Grand Valley economy, according to the latest results of a twice-yearly member survey conducted by the Grand Junction Area Chamber of Commerce.
Nearly a quarter of those who responded to the survey plan to hire more staff over the next six months. Still, slightly more than a third don’t expect the local economy to begin to recover until after 2014.
While responses to survey questions varied widely, there was an underlying expectation, said Diane Schwenke, president and chief executive officer of the chamber. “It’s not going to get any worse.”
The chamber conducts online surveys about every six months to track attitudes about the national and local economies. The latest survey attracted 262 responses.
Nearly 54 percent of those who responded indicated they still consider the Grand Valley economy “weak,” down slightly from the proportions reported in the fall and spring surveys last year.
Another 16 percent deemed the local economy “extremely weak,” while nearly 25 percent viewed the economy as “stable.”
More than 41 percent of respondents said their outlook about the economy has remained unchanged since last fall. Another 30 percent said they’re more optimistic, while 27.5 percent said they’re less optimistic.
Consumer confidence remained the factor most often cited as likely to affect business over the next six months. But respondents also cited the perception of a weak economy and increased costs related to new fees and regulations. Nearly 24 percent of respondents singled out implementation of the new federal health care law Schwenke said she was most encouraged by responses to the survey question about employment levels over the next six months. More than 24 percent of respondents said they plan to increase staffing, up from the fall and spring surveys last year. “That’s a very positive indicator,” she said.
Almost 9 percent of respondents said they anticipate layoffs, while nearly 67 percent expect no changes in staffing.
Asked about sales over the next six months, more than 34 percent of respondents expect sales to increase, while nearly 10 percent anticipate a decrease. Almost 57 percent forecast no change.
At the same time, though, more than 47 percent of those responding to the survey plan to delay capital expenditures over the next six months because of the economy.
At 34 percent, the largest proportion of respondents don’t expect the local economy to begin to recover until later than 2014. Another 24 percent said recovery already is under way, while another 24 percent predicted the start of recovery in 2014. Schwenke said expectations for recovery have been pushed back in the results of nearly every survey conducted over the past five years.
While the survey results constitute only a statistical snapshot of what chamber members think when they respond, the results generally correlate with what Schwenke said she hears.
One “troubling” trend, Schwenke said, has been a downturn in sales tax collections for the City of Grand Junction and Mesa County, a key indicator of retail activity. City sales and use tax collections have dropped on a year-over-year basis in seven out of the last eight months. County sales tax collections have dropped in eight out of the last nine months.
Given labor statistics that reflect a shrinking work force, Schwenke said the downward trend in sales tax collections — and sales — could be attributed to a smaller population. As more people move away from the Grand Valley to find work, the fewer people who remain buy less.
At the same time, the Grand Valley lagged behind other areas of the state in experiencing the full effects of the recession and likely will lag behind other areas in enjoying more robust recovery, Schwenke said.
In addition to the usual questions about the economy, the latest survey also asked chamber members about their plans for health care insurance under the new federal law.
Fully 63 percent of those responding to the survey indicated they’re likely to continue to provide coverage when enrollment begins Oct. 1 in a new health benefits exchange in Colorado. Another 16 percent said they’re “somewhat likely” to offer coverage, while yet another 16 percent said they’re “unlikely” to provide coverage.
Schwenke said she was somewhat surprised by the results given confusion over the new health care law and what was expected would be reluctance among small employers to participate.