Phil Castle, The Business Times
While the labor market has yet to rebound, other aspects of the Mesa County economy reflect improving conditions, according to an economist long involved in compiling a statewide forecast.
“Lots of things look fine,” said Richard Wobbekind, executive director of the business research division at the University of Colorado Leeds School of Business.
His assessment includes real estate, retail sales and tourism. Over the long term, the contributions of Colorado Mesa University and regional health care services also bolster the outlook, Wobbekind said.
The division compiles an annual business and economic outlook for Colorado with forecasts for 13 industry sectors. Wobbekind reviewed the prospects for the national, state and local economies in a presentation at a quarterly meeting of the Grand Junction Area Chamber of Commerce.
Nationally, the jobless rate has fallen to a level considered close to full employment. Rising consumer confidence and low interest rates have bolstered retail sales as well as a willingness to take on more debt, Wobbekind said.
There could be slowing in the manufacturing sector, though, with a downturn in the energy industry related to low oil and natural gas prices and a strong dollar making United States exports more expensive and therefore less competitive, he said.
Colorado continues to experience one of the fastest-growing economies in the country with increases in payrolls and population, Wobbekind said.
The outlook calls for slower job growth in 2016 with a net gain of 65,100 jobs. The statewide seasonally adjusted unemployment rate — at 3.6 percent for November — should remain below 4 percent, he said. “We still see this as very solid job growth.”
Some of the slower job growth can be attributed to layoffs by companies involved in oil and natural gas development as well as the firms that provide services to the industry. While lower gasoline and natural gas prices offer economic advantages, they’re outweighed in Colorado by the disadvantages associated with job losses, Wobbekind said.
Like Denver, Grand Junction serves as a regional hub for the energy industry and has experienced the effects of the downturn, he said.
While oil and gas prices eventually will rebound, the outlook is more dire for the coal mining industry as demand drops for coal used in power plants for electrical generation, he said. “This is an industry that it’s going to be tough to come back.”
Construction payrolls have increased along with residential and commercial building in Colorado.
Lower prices for beef and corn also will affect the agricultural industry in Colorado, although such specialty crops as peaches and winegrapes have fared better, he said.
Mesa County has experienced economic and job growth in the aftermath of the recession, but has yet to rebound to pre-recession levels, Wobbekind said. In fact, there’s been a year-over-year decline in employment.
As of November, Mesa County payrolls had decreased 980 over the past year, while the ranks of the unemployed have increased 154. The labor force has shrunk 826 and at 72,759 remains well below peak employment of 84,000 in November 2009.
The outlook is better, Wobbekind said, for what he described as a stable and growing real estate market as well as growth in retail and wholesale trades.
A strong university and regional health care services as well as highway access and scenic beauty are among the attributes that make Mesa County attractive, Wobbekind said. “There’s a lot of things to be proud of.”