Phil Castle, The Business Times
Both tailwinds and headwinds are forecast for Mesa County in the year ahead, according to the latest verson of an annual economic outlook report.
Mesa County has fared well in the midst of a pandemic in terms of rising wages, construction activity and bank deposits. The leisure and hospitality and energy sectors have fared less well, however, with declines in commercial air traffic and drilling.
The prospects for 2021 are similarly mixed, said Richard Wobbekind, senior economist at the Leeds School of Business at the University of Colorado at Boulder.
The business research division of the Leeds School of Business prepares the annual report, which includes sections for various industry sectors and geographic areas. Wobbekind reviewed the report during an online event hosted by the Grand Junction Area Chamber of Commerce.
Nonfarm payrolls have rebounded in Mesa County to employment levels before the onset of the coronavirus pandemic, he said. “You’ve had a nice bounce back.”
Education and health services is among the sectors gaining jobs, while the energy sector has lost jobs. Businesses providing personal services have been hit especially hard by the pandemic and related restrictions, Wobbekind said.
The Mesa County labor force has yet to return to peak employment levels in 2009, however, he added.
Wages paid in the second quarter of 2020 were up 3.6 percent over the same quarter in 2019, a gain Wobbekind said was one of the healthiest in Colorado.
Personal income also has increased, Wobbekind said.
A jump in deposits constitutes good news for banks, he said, although more lending is needed to bolster the economy.
Construction activity has increased in Mesa County in terms of both building permits and valuation, he said. The construction of multi-family housing contributed to the gain.
Mesa County has experienced one of the biggest increases in home price appreciation in Colorado, although prices remain lower than other areas of the state.
At the same time, energy exploration and development activity has decreased in Western Colorado with a continued decline in drilling permits, he said.
Tourism has declined as well in the aftermath of the pandemic, Wobbekind said. Enplanements at the Grand Junction Regional Airport — the number of passengers boarding regularly scheduled commercial flights — has dropped more than 40 percent on a year-over-year basis.
The outlook is more promising for the agricultural sector, although drought conditions persist and a spring freeze damaged the Grand Valley peach crop.
Mesa County could benefit from the relocation of people who have the ability work remotely from urban to more rural areas, Wobbekind said. It’s not certain, though, whether the moves will be temporary or more permanent.
Statewide, Wobbekind said payrolls are expected to grow next year, but not enough to recoup job losses attributed to the pandemic and related restrictions. Payrolls are expected to increase 40,500 in 2021, about a third of estimated job losses for 2020.
The two industry sectors hit hardest by the pandemic in 2020 are expected to recoup the most jobs in 2021, he said. Employment is expected to increase 19,200 in the leisure and hospitality sector and 14,700 in the trade, transportation and utilities sector.
Payrolls are forecast to increase 4,500 for the education and health services sector, 4,400 for professional and business services, 2,500 for financial activities and 2,300 for manufacturing. The natural resources and mining sector likely will gain about 400 net new jobs in 2021 as oil and natural gas prices move higher, Wobbekind said.
Government payrolls are predicted to decline 6,900 as budgets shrink, he said.
Nationally, it remains uncertain when the economy will return to levels before the pandemic and what that recovery will look like, Wobbekind said. While payrolls have increased, employment remains 9.2 million below February.
Vaccines and strong retail sales could provide economic tailwinds in 2021, he said. But the ongoing effects of the pandemic poses a headwind, as does a downturn in tourism. The list of what’s unknown is even longer, including the effects of the shift to remote work and changing consumer behaviors.