Economic drop in GJ rivals worst in nation
Economic activity in Grand Junction fell by one of the highest percentages among metropolitan areas in the U.S. last year, a decline led by the flailing construction and banking industries, according to a federal report released Tuesday.
Grand Junction’s gross domestic product, when adjusted for inflation, totaled $4.25 billion in 2010, roughly $143 million less than in 2009. It was the only metro area in Colorado to see its economy decline, the U.S. Bureau of Economic Analysis reported.
Although it represents an improvement compared to the 6.3 percent slide in Grand Junction in 2009, the 3.3 percent drop in economic activity in 2010 ranked the Grand Junction area 362nd out of 366 metro areas. Only Casper, Wyo. (3.8 percent), Farmington, N.M. (3.8 percent), Vallejo-Fairfield, Calif. (3.6 percent), and Sebastian-Vero Beach, Fla. (3.6 percent), experienced larger economic slumps.
Production from natural resources and mining companies climbed from $509 million in 2009 to $573 million in 2010. But those gains were offset by sharp losses in the construction and financial-services sectors. The construction industry’s GDP plummeted from $367 million to $271 million, while financial services’ GDP dropped from $697 million to $656 million.
Local business and economic development experts said they aren’t surprised by the figures.
“Our economy was in pretty rough shape a year ago,” said Kelly Flenniken, interim executive director of the Grand Junction Economic Partnership.
She and Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce, pointed out that the information in the report is somewhat dated, and that local economic conditions seem to have hit bottom and are starting to rebound.
Flenniken said while the federal research is valuable and GJEP pays attention to it, she believes officials shouldn’t dwell on it.
“It’s important that we don’t spend too much time and effort focusing on past things because negativity breeds negativity,” she said.
Schwenke said the uptick in the energy industry last year could be a harbinger of things to come, noting it is a primary job generator and other industries, such as construction, real estate and financial services, follow behind it.
She said local governments’ sales tax receipts are inching up, particularly in use tax, which is reflective of business spending. That bit of good news is counterbalanced by an unemployment rate that remains above 9 percent and declining work force numbers that suggest people may be moving out of the county.
Given all of that, Schwenke predicts Grand Junction’s GDP will hold steady this year compared to last year.
“Flat is the new good,” she said. “If that stops the free fall, that’s good.”