Coal dead, but real estate, construction our best hope

The dean of the University of Colorado Leeds School of Business declared Western Slope coal mining dead for now, but predicted growth in real estate and construction will generate “strong” alternative revenue sources for Mesa County next year.     

Richard Wobbekind, who is also executive director of research at the school, called his face-to-face meeting with members of the Grand Junction Area Chamber of Commerce his “toughest” of the year because so much of the local news is negative, particularly the forecast for coal, oil and natural gas.

He tried to reassure about 150 chamber members Monday that the Mesa County economy continues to bump along with positive signs of life, though it lags in every sector compared to Denver.

“Your real estate is stable and moving in the right direction,” Wobbekind said. “Manufacturing showed a solid 2.2 percent annual growth” over the past five years.

Thanks to Interstate 70 and its proximity to Grand Junction’s rail yards, wholesale trade, especially related to agriculture, manufacturing and retailing, was strong in Mesa County in 2015 and should be so next year, he said.

Retail sales, outdoor recreation and travel and leisure are other sectors of the local economy expected to gain ground, Wobbekind said.

The current dearth of single- and multi-family residences, increase in building starts and growing demand for new housing means construction in Mesa County is also likely to pick up, he said.

On the other hand, agriculture, usually a bright spot, took a hit this year.

Depressed prices for commodities such as beef and corn caused the sector to shrink compared to its much stronger performance in 2014. Despite the strength of specialty crops such as peaches and specialty goods, Wobbekind predicted local agriculture overall would continue to sputter in 2016.

“You would hope their balance sheets are strong and will see them through this time,” he said, adding that some farms should consider reducing purchases in the coming year in anticipation of continued low prices.

Apologizing for being blunt, he said Western Slope coal lies on death’s door. No coal-fired plants are being built in the nation because there is no demand for them. Investment in natural gas plants is strong by comparison.

The strong dollar makes exports of coal to other nations unlikely. Finally, nations overseas are mining their own sources of coal, Wobbekind said.

About 5 percent of Western Slope mining jobs, perhaps more, will be eliminated in 2016, he said. This will impact Mesa County even though the mines are located elsewhere.

Oil and gas extraction faces a similar dilemma. Unlike coal, however, oil and gas has a solid future and could cycle back as the current oversupply diminishes and technology and investment makes processing, storage and shipment of liquid natural gas more economical, he said.

Though natural resource extraction employs few in Mesa County directly, support services for the sector have been a large source of good-paying jobs in Mesa County in the past and will be again — just not next year.


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You mean this guy told the G.J. Chamber directly to their face that “coal is dead” as an economic pursuit on the western slope, and that oil and natural gas extraction are also bad bets for the area economically now? So, the Chamber has officially been informed of this by an expert? Do you think the chamber will now amend its 2014 Public Policy Guideline #11, which states, “Energy and mineral development are strong economic drivers in the regional economy.” (http://www.gjchamber.org/advocating/public-policy-guidelines). If they don’t, why won’t they?

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