Midyear update: Mesa County lags behind growing Colorado economy

Richard Wobbekind
Richard Wobbekind

Mesa County continues to lag behind other metropolitan areas in Colorado in four measures of economic performance, according to a midyear report from the University of Colorado in Boulder.

Statewide, the economy continues to expand, but at a slower pace. While payroll gains still are expected to reach 62,000 by the end of the year, job growth has shifted among industry sectors.

“Our original forecast for 2016 is similar to what we’re in fact seeing. But there are some sectors that are doing better than we anticipated and some that aren’t doing as well,” said Richard Wobbekind, executive director of the research division at the Leeds School of Business at CU.

The division prepares an annual economic forecast for the state based on the recommendations of more than 100 business and government professionals statewide who serve on a steering committee. The division offers a midyear update.

Mesa County ranks last among seven metro areas in Colorado in terms of employment growth with a gain of less than 1 percent between May 2015 and May 2016, according to the update. Employment growth topped 3 percent in the Denver, Aurora and Broomfield area as well as the Fort Collins and Loveland area. Statewide, employment increased 2.4 percent.

Mesa County also posted the highest monthly unemployment rate among the metro areas  at 5.7 percent in May. The seasonally unadjusted jobless rate remained below 3 percent in Fort Collins and Boulder. The statewide seasonally unadjusted rate stood at 3.6 percent, while the seasonally adjusted rate was lower at 3.4 percent.

Mesa County had the second lowest per capita personal income among the seven areas at less than $40,000 a year. Only Pueblo was lower. Statewide, per capita personal income in Colorado was estimated at $48,869, based on annual data for 2014.

Home prices continue to appreciate at a slower pace in Mesa County than other metro areas in Colorado with some of the hottest real estate markets in the country.

According to the Federal Housing Finance Agency, home prices in Mesa County increased more than 4 percent between the first quarter of 2015 and first quarter of 2016. Statewide, home prices appreciated 12.5 percent during that span, with prices going up more than 14 percent in Boulder and nearly that much in the Denver, Aurora and Broomfield area.

Statewide, the Colorado economy should continue to outperform the national economy, although at a pace slower than the past two years, according to the midyear update.

Wobbekind said there’s been more growth in payrolls in the government and leisure and hospitality sectors than what was initially forecast. Commercial and residential construction remains strong, as do the manufacturing and information sectors. But employment in the natural resources and mining sector has dropped 16.8 percent over the year ending in May as oil and natural gas prices and demand for coal has dropped, he said. “We’re really seeing job growth across the board except for the natural resources and mining sector.”

Employment in the leisure and hospitality sector increased 5 percent for the year ending in May following a record-setting year for tourism in Denver in 2015. Visits to national parks and monuments in Colorado increased 17.3 percent in 2015, while Colorado Ski Country USA reported a record-breaking season for the 21 member resorts of the trade association.

The Colorado National Monument near Grand Junction attracted 588,006 visitors in 2015, an increase of 41 percent over 2014, according to the National Park Service. Powderhorn Mountain Resort east of Grand Junction reported a 45 percent increase in skier visits during the 2015-2016 season.

Employment in the education and health services sector increased 3.1 percent over the year ending in May as demand for health care services increased as more people obtained insurance under federal reforms.

Low commodity prices and declining exports continue to affect Colorado farmers and ranchers, the update stated, although drought conditions in some parts of the state have moderated.

Employment in the construction industry continues to increase, but hasn’t yet rebounded to pre-recession levels. As of April, the year-to-date value of all construction in Colorado had increased 15 percent over the year before.

Manufacturing payrolls have yet to reach expectations for the year, with a slight year-over-year decrease. Manufacturing gross domestic product increased 3 percent in 2015, making it the eighth-fatest growing industry in Colorado.

Professional and business services increased employment 2.2 percent over the year ending in May with more than half that gain in professional, scientific and technical services.

International trade has declined in Colorado with an 11.1 percent year-over-year decrease in exports as of April. Optical, photographic and medical equipment remain the top exports from the state. Canada, Mexico, China and Japan remain the top export markets.