Local economy ‘sideways’
West Slope still trails metro east, expert says
Grand Junction will maintain its position as a regional economic hub in 2014 with job growth in both construction and manufacturing, a University of Colorado economist said Monday.
Though marginal economic growth is predicted, Mesa County will continue to lag behind the Front Range, said Rich Wobbekind, executive director of the Business Research Division at the University of Colorado Leeds School of Business.
“So you’re going kind of sideways,” Wobbekind said. “I think you know that if you live here. I can’t tell you things are growing at 10 percent when they aren’t.”
Population and employment will increase, but mostly on the Front Range, he said.
The Mesa County labor force declined about 1.3 percent, from 78,952 in 2012 to 77,940 this year. That trend is expected to continue as aging workers retire, Wobbekind said.
On the plus side, Wobbekind saw economic diversification like that being pushed by the Grand Junction Economic Partnership as a positive development.
Employment growth in construction, aviation, aerospace, health care and food and beverage manufacturing will reduce high unemployment, which hovers around 8 percent locally. Increased employment could attract new business and investments to the area, he said.
Speaking at the Grand Junction Area Chamber of Commerce quarterly membership luncheon, Wobbekind said international energy giant Noble plans to invest $2 billion in Colorado starting next year, holding out hope that energy production could make a comeback in the next five years.
“I still think energy is going to be a significant contributor here in the long run,” he said. “It’s just not going back to where it was in the (next) two or three years.”
Local peach growers will continue to expand markets, weather permitting, as demand for agricultural products grows, Wobbekind said.
“Colorado outperforms the nation,” he said. “Commodity prices (will) benefit both the agriculture and energy sectors. We think we’ll get a little bit stronger (in 2014), especially in energy.”
Overall construction will also grow as a sector of the economy, especially multi-family housing, though a “disproportionately high share” of it will take place on the Front Range, he said.
An increase in multi-family residential construction likely means more people will be renting instead of buying homes. After many years of building more housing than the market could support, the construction industry slow-down has managed to reverse the trend, Wobbekind said.
For example, foreclosure filings have dropped off so much, CU business researchers no longer consider them to have a significant impact on the housing market, Wobbekind said.
There were 979 foreclosure filings in Mesa County in 2012, of which 596 sold, according to a third-quarter report by Bray Real Estate distributed during the luncheon.
For the same period this year, 587 foreclosures were filed, of which 433 sold, the Bray report said.
Residential properties sold through the third quarter numbered 2,415, four fewer than the same period in 2012. The median sale price — $173,500 — was 5 percent higher this year, however, the report said.
“Local real estate growth is lagging 18 to 24 months behind state and national levels,” according to Wobbekind’s recently published “Colorado Economic Forecast for 2014.”
Mesa County saw housing sale prices slowly increase in 2013 from $175,000 in February to a high of $191,000 in June, the forecast said.
Local real estate sales increased about 8 percent compared to 2012 and Wobbekind foresees continued improvement, the forecast said.
“It doesn’t look real rosy, but I think we need to keep moving forward,” CU Regent Glen Gallegos said after the talk. “Construction growth is something that we’re looking forward to.”
“Another bright spot is the potential for the return of tourism here,” Wobbekind said.
In 2013, Mesa County saw record numbers at some large events, including the Colorado Mountain Winefest and the Palisade Peach Fest, the forecast said.
Ski tourism is expected to go up slightly, but summer car tourism looks even more promising thanks to lower gas prices, Wobbekind said.
Large forest fires and floods in 2013 could have a negative short-term impact on out-of-state visitors, however, he said.
“Its very exciting,” said Per Nilsson, general manager of DoubleTree by Hilton. “I think the future looks better in 2014 than it has the last couple years because we’re going from erratic ups and downs to stabilizing the economy.”
“I really think it’s going to be steady as she goes,” Wobbekind said. “You really went through a rapid cycle and I think it takes a little bit longer to get out of it, but stability is setting in.”
Grand Junction Area Chamber of Commerce President Diane Schwenke said Wobbekind presented information that sounded familiar.
“I was hoping for better news. It would be nice,” Schwenke said. “It’s kind of like a broken record. Basically, we’ve heard it before.”
“Most of the information he presented on Mesa County was pretty familiar, so I don’t think there were any big surprises,” she said.