Phil Castle, The Business Times
When Matt Rosenberg looks at the world, he sees the potential for economic volatility: a referendum in the United Kingdom over whether to remain or leave the European Union; a possible real estate bubble in China; and, of course, a presidential election in the United States.
While there’s not always a direct correlation between global trends and local conditions, Rosenberg says what happens elsewhere in the world can affect what happens in the Grand Valley. The effects of low oil and natural gas prices on the energy industry and in turn the economy constitute a prime example, he says.
But such local advantages as comparatively inexpensive labor and real estate costs, a more diversified economy and the allure of outdoor recreation also play a role, Rosenberg adds.
“We could be an economy that thrives even if some of these global things happen.”
Rosenberg, a professor at Colorado Mesa University who also works as managing director of RoseCap Investment Advisors in Grand Junction, was scheduled to present an overview of the global, state and local economies during a quarterly membership meeting of the Grand Junction Area Chamber of Commerce. He discussed his presentation beforehand during an interview with the Business Times.
If there’s a theme for the presentation, Rosenberg says, it’s the potential for a volatile summer.
He cites in particular the uncertainty over a referendum in the United Kingdom on whether or not to leave the European Union as well as issues in China related to real estate, mounting debt and the value of its currency. In the United States, a presidential election increases uncertainty. Plus, questions persist over when and how much the Federal Reserve will raise its key short-term interest rate.
There’s always a chance, too, of an unforeseen global crises with widespread ramifications, Rosenberg says.
It’s difficult to determine beforehand how much — or even if — some global events could affect the Grand Valley economy, he says.
What’s more certain, Rosenberg says, is the long-term effects of oil and natural gas prices in an area where the energy industry plays a prominent role. There’s a lagging correlation, in fact, between energy prices and subsequent economic conditions.
Rosenberg attributes low commodity prices in large part to an increasing supply of oil and natural gas made possible by improving extraction technology and decreasing demand caused by other technologies. Barring some sort of major supply disruption, he expects commodity prices to remain low for perhaps 10 to 12 years with oil selling in a range from $30 to $60 a barrel.
The United States economy has fared comparatively better than other major economies around the world, Rosenberg says, because of a generally favorable business environment that includes low interest rates and energy costs as well as access to capital.
While volatility in global economies has the potential to lead to volatility in U.S. stock markets, Rosenberg advises investors to remain calm because the conditions remain in place for businesses to make money.
As for the Grand Valley, Rosenberg says his outlook remains upbeat as the economy diversifies and becomes less vulnerable to market cycles in the energy sector.
That means Mesa County could control its own economic fate regardless of what happens elsewhere in the world, he says.
Rosenberg cites as one example the growth of Colorado Mesa University and the opportunity to turn Grand Junction into something of a college town and in turn establish a platform for other development. “CMU is such a game-changer for Grand Junction.”
Tourism constitutes another important economic driver, and the area enjoys an advantage in offering varied climactic zones that change from the high-elevation forests of the Grand Mesa to the desert environs found elsewhere.
The scenery and outdoor recreation attract not only visitors, but also businesses, Rosenberg says, citing his own investment advisory firm as an example.
After attending the University of Texas at Austin and working for various firms, including a real estate investment firm in Atlanta, Rosenberg founded RoseCap in 2010. He says he moved his firm to the Grand Valley because of the amenities the area offers him and his family. “This place is awesome.”
Although the Grand Valley hasn’t experienced the rapid growth of other areas of Colorado, the local area offers some advantages in comparably less expensive real estate and labor costs, Rosenberg says. “Grand Junction is a really good place to do business.”