Phil Castle, The Business Times
While the Mesa County economy hasn’t yet returned to pre-recession levels, indicators reflect improving conditions, according to an economist long involved with compiling a statewide forecast.
“Overall, you’re getting back to some growth and normality,” said Richard Wobbekind, executive director of the business research division of the Leeds School of Business at the University of Colorado in Boulder.
Moreover, comparisons between the present situation and the boom that preceded the bust might not be appropriate given rapid growth was caused by what Wobbekind described as a “commodity bubble that blew up” in higher natural gas prices that spurred regional development.
Wobbekind shared the economic outlook for Mesa County, Colorado and the United States during a presentation at a quarterly meeting of the Grand Junction Area Chamber of Commerce.
The division compiles an annual business and economic outlook for Colorado with forecasts for 13 industry sectors. A total of more than 100 business, government and industry leaders contributed to the 2017 outlook. That included Kristi Pollard, executive director of the Grand Junction Economic Partnership, and Steve Jozefczyk, business development manager of the group.
Gross domestic product, the broad measure of goods and services, remains stable in Mesa County, Wobbekind said.
Nonfarm employment in Mesa County has increased 3,800 over the past seven years for a gain of about 6.5 percent, Wobbekind said. Not counting the roller coaster climb and drop of the boom and bust, Mesa County job growth has resumed in its long-term direction, he said. “You’re not that far off the trend.”
The wholesale and retail trade and leisure and hospitality sectors have experienced the most employment growth, he said. Average wages have increased 2.9 percent.
While not as dramatic as the appreciation that’s occurred on the Front Range of Colorado, home prices have increased in Mesa County, Wobbekind said.
New home construction has increased as well, as have bank deposits, he said.
“I think you’re on a good path,” Wobbekind said. “Let’s keep it going.”
Statewide, job growth is projected to continue in 2017 with a forecast addition of 63,400 jobs to nonfarm payrolls, Wobbekind said. “Lots of sectors are really doing quite well in state.”
The outlook reflects the prospect for continued population growth, he said. Colorado is the second-fastest growing state in terms of its proportional increase and seven-fastest overall. Almost all of that growth has occurred along the Front Range between Fort Collins and Pueblo, he said.
The leisure and hospitality sector is expected to add the most new jobs in 2017 at 12,100, followed by education and health services at 10,600 and professional and business services at 9,200.
Construction payrolls are expected to increase 9,000 even as the total value of residential and nonresidential construction in Colorado climbs to record levels in 2017, Wobbekind said.
Employment in natural resources and mining, which includes oil and natural gas development, is expected to decline slightly in 2017. But higher crude oil prices and the prospect of a more favorable regulatory environment under the Donald Trump administration could spur more drilling activity, Wobbekind said. More than 80 percent of oil and natural gas development in Colorado occurs in Garfield and Weld counties, he said.
Low cattle and grain prices will continue to hamper the Colorado agricultural industry in 2017, reducing ranch and farm income to about $392 million in 2017.
Nationally, Wobbekind said he expects unemployment rates to remain at low levels in 2017 generally considered indicative of full employment with monthly payroll increases of between 160,000 and 170,000. People working part time should get more hours, and the labor force participation rate should move back up, he said.
Consumers will remain the major contributor to the U.S. economy with higher income and confidence levels along with lower levels of debt that enable them to borrow for purchases, Wobbekind said.
Business investment should play a larger economic role, he said, especially if tax reforms result in lower corporate tax rates.
Interest rates are likely to increase, but remain low by historical standards, he said.