Midyear update: Colorado growth accelerating, but Mesa County lags

Richard Wobbekind
Richard Wobbekind

While economic growth has accelerated in Colorado, Mesa County lags behind other metro areas in the state in some measures of performance, according to a midyear update prepared at the University of Colorado at Boulder.

Statewide, the economy has grown more quickly than initially expected. Nonfarm payrolls should grow more than 62,000 by the end of the year, with the biggest gains in the natural resources and mining sector.

“Employment growth there is much higher than we anticipated. It’s been very strong. Energy prices are obviously factoring into it,” said Richard Wobbekind, executive director of the research division of the Leeds School of Business. The division prepares an annual economic forecast for Colorado and offers a midyear update.

Along with other information, the update offers a comparison of how seven metropolitan areas in Colorado have fared in terms of four metrics: home prices, unemployment rates, employment growth and per capital personal income.

Mesa County ranks third among the seven areas in terms of the increase in home prices between the first quarters of 2017 and 2018 as tracked by the Federal Housing Finance Agency. Colorado Springs ranked first and Fort Collins second. Statewide, home priced increased 9.9 percent.

For the first seven months of 2018, the median price of homes sold in Mesa County increased 9.3 percent to $235,000, according to information from the Multiple Listing Service.

Mesa County reported the third-highest seasonally unadjusted unemployment rate among the seven areas for May, behind Colorado Springs and Fort Collins.

According to estimates from the Colorado Department of Labor and Employment, the jobless rate fell to 2.9 percent in Mesa County in May, the lowest level in 11 years. Since May, however, the unemployment rate in Mesa County has increased a point and stood at 3.9 percent for July.

Mesa County ranked sixth among the seven areas for employment growth between June 2017 and June 2018.

Greeley reported the largest proportional gain, followed by Colorado Springs. Pueblo reported the smallest increase. Statewide, employment increased 2.8 percent.

According to the Colorado Department of Labor and Employment, Mesa County payrolls increased 1,924 between June 2017 and June 2018, an increase of 2.7 percent. For July, the year-over-year payroll gain was estimated at 1,714, a gain of 2.4 percent.

Mesa County also ranked sixth among the seven metro areas for per capita personal income. Boulder came in first and Pueblo last. Per capital personal in Colorado was $52,097 a year.

Statewide, the economy has grown more quickly than what was projected in the outlook report in December.

Gross domestic product, the broad measure of goods and services produced in the state, is up nearly 4 percent. That’s bolstered the optimism of business leaders, Wobbekind said.

Labor force participation has increased, enabling employment growth to outpace declining net migration. Labor shortages persist, however, as businesses struggle to find skilled workers.

While the outlook report forecast a 47,100 increase in nonfarm payrolls for 2018, that number was revised upward 15,500 to 62,600.

Employment is projected to increase 13.7 percent in the natural resources and mining sector as rising oil prices encourage more production, particularly in Weld County. Natural gas production also has increased  Coal production is expected to continue to decline in Colorado — down 1.2 million tons to 14 million tons in 2018.

Construction payrolls are forecast to increase 4.9 percent in 2018. “It’s finally back to the same level of employment that they were at pre-recession,” Wobbekind said. “They are really mostly constrained by lack of available workforce.

Employment in the leisure and hospitality sector is expected to grow 2.9 percent as visits to national and state parks and Colorado in general increase. Skier visits for the 2017-2018 season dipped from a year ago with low snowfalls, but still topped the five-year average.

Professional and business services are expected to increase payrolls 2.9 percent with gains in computer security and legal assistance.

Payrolls also are expected to increase in other industry sectors in Colorado in 2018: 2 percent in financial activities; 1.9 percent in government; 1.8 percent in trade, transportation and utilities;
1.7 percent in education and health services; 1.6 percent in information; and 1.4 percent in manufacturing.

The agriculture sector has fared less well heading into the second half of 2018 as low commodity prices, drought and wildfires hamper growth, Wobbekind said. Farmers and ranchers also face challenges from a strong U.S. dollar and trade wars, he said.