Different indicators tell tale of two economies

Is the Grand Valley economy still stuck in the mud of an all-too-slow recovery or are conditions actually improving? It all depends on who you ask — or more precisely, what indicators you consider.

According to the latest results of an annual analysis of job and wage growth and high-tech output, Mesa County doesn’t fare ware well compared to other small metropolitan areas around the United States. Using the Milken Institute Best-Performing Cities Index for 2017, Mesa County ranks 187th among 201 small metro areas evaluated last year.

Mesa County came in 134th for job growth between 2011 and 2016 and 144th for wage growth between 2010 and 2015. Mesa County ranked 166th for job growth between 2015 and 2016 and 167th for wage growth between 2014 and 2015. The county placed 151st for short-term job growth between August 2016 and August 2017.

In terms of growth of high-tech production, Mesa County placed 179th for the period between 2011 and 2016, 172nd for the span between 2015 and 2016 and 158th for 2016.

The overall ranking is a bit deceiving in that it’s based in part on what economists call lagging indicators — measures of what’s happened in the past. It’s no surprise Mesa County lags behind other metro areas given what happened in the immediate aftermath of the recession. The county has only recently begun to rebound from the downturn. Lagging indicators can work the other way, too. Mesa County has ranked as high as third in the Milken index, but that was based on what happened during the energy boom that preceded the bust.

Now, consider some other indicators, including those for tax collections.

According to Mesa County and the City of Grand Junction, combined sales and use taxes collected during 2017 rebounded to their highest levels since 2008.  The county reported an 8.3 percent increase over 2016, while the city reported a 6.8 percent gain.

Sales tax collections offer a broad measure of well, sales. That’s not only for clothing, electronics and sporting goods, but also automobiles, construction supplies and restaurant meals. That’s everything consumers buy as well as everything businesses buy, too. Sales tax collections also reflect sentiment in that consumers and business owners tend to spend more when they’re feeling confident in the economy than they do when they’re less optimistic. Sales tax collections still constitute a lagging indicator, but only by a couple of months. December collections reported in January reflect November sales.

So what indicators should business owners and managers — not to mention individuals — take to heart in evaluating local economic conditions? The Milken index, tax collections or perhaps such other indicators as jobless rates, housing starts and real estate transactions? How about a leading indicator, such as the number of companies the Grand Junction Economic Partnership is assisting in  their efforts to relocate or open operations in Mesa County?

The simple answer is all of the above. Indicators measure different parts of the economy in different ways. Consider them dots that should be connected to complete a picture. You’ll likely see the Grand Valley economy has lagged behind other areas of Colorado and the United States in recovering from the recession. But substantial improvement has occurred, too.