Phil Castle, The Business Times
Continued growth in payrolls and population combined with mostly upbeat projections for most industry sectors bode well for Colorado and Grand Junction.
“Overall, it’s a pretty optimistic outlook for the Colorado economy and Grand Junction economy,” said Alison Felix, an economist who serves as a vice president and Denver branch executive for the Federal Reserve Bank of Kansas City.
Felix detailed her outlook for the state and local economies during a forum the Federal Reserve Bank of Kansas City hosted in Grand Junction.
The Federal Reserve and its network of 12 banks oversees monetary policy, maintains payment services and regulates banking operations. The Federal Reserve also conducts research and shares information about economic indicators and trends, Felix said. The Kansas City bank serves Colorado and all or parts of six other states.
Colorado has outpaced the United States for payroll employment growth with a 17.3 percent increase since December 2007 and a 1.7 percent gain over the past year, Felix said.
The recovery following the Great Recession was “quite a bit more shallow” in Grand Junction. But as the pace of employment growth recently has slowed along the Front Range, it’s accelerated in Grand Junction, she said. Payroll employment increased 2.3 percent in Grand Junction between March 2018 and March 2019.
Employment gains in Colorado have been broad-based, she said, with the majority of industry sectors in adding jobs over the past year.
Unemployment rates remain low, retreating to a nearly 50-year low of 3.6 percent nationally, she said.
According to the latest estimates from the Colorado Department of Labor and Employment, the seasonally unadjusted jobless rate fell a half point to 3.3 percent in Mesa County in April. The statewide seasonally adjusted rate slipped a tenth of a point to 3.4 percent.
While members of the baby boom generation retire, other people have re-entered the work force, Felix said. The labor force participation rate has increased in Colorado over the past three years to 69.3 percent.
At the same time, more people continue to move to Colorado, which in turn drives the economy, she said.
Residential construction activity has increased in Colorado since 2009, but the pace of single family permitting has slowed this year statewide and in Grand Junction. Low housing inventories have driven up prices, Felix said.
The services sector continues to expand. Manufacturing activity has been strong the past two years, but the pace of growth has slowed because of what Felix said has been a strong U.S. dollar, weakness in the global economy and uncertainty over trade policy.
Exports from Colorado rose 3.3 percent in 2018, but have declined on a year-over-year basis so far in 2019, she said.
Energy activity has increased in Colorado over the past two years in response to higher oil prices. The results of surveys of the industry indicate oil prices are expected to remain above profitable levels for the next two years. Low prices have resulted in weakness in the natural gas sector, however, Felix said.
Asked about the effects of state regulatory changes on the energy industry, Felix said it’s too early to tell. “I honestly don’t think we know the full extent yet. It’s certainly something we’re watching.”
The agricultural sector is the weakest in the region, she said. Increased production has exceeded growing demand, resulting in low commodity prices and declining farm incomes.
Overall, though, the economic outlook remains optimistic for Colorado and Grand Junction, Felix said.