Probably no recession for us up here in the mountains of Colorado

The headline in the Denver Post did not really answer any questions about the chances of a recession in Colorado. It asked: “Can state dodge recession again?”

Since the newspaper was unwilling to stick its neck out on that question, I’ll answer it: Yes. And that’s a big “yes” when it comes to the unique economic conditions we experience here in the mountains of Grand County.

With all the talk out there almost everyday ad infinitum about “recession,” I thought I’d at least define it beyond the vague notion that a recession is just a general slowing of the economy. Here’s what Mr. Google says: “A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP (gross domestic product), real income, employment, industrial production, and wholesale-retail sales.”

That we are even having to ask that question, after more than a year of hand-wringing, is an answer in and of itself. For me there’s no question that we will dodge a recession and that the nation will have the “soft landing” also much talked about in the financial media.

So let’s define that too: “A soft landing, in economics, is a cyclical slowdown in economic growth that avoids recession. A soft landing is the goal of a central bank when it seeks to raise interest rates just enough to stop an economy from overheating and experiencing high inflation, without causing a severe downturn.”

So that’s what I predict for Grand County. No recession and a soft landing. We are already, in fact, in what I would call a soft landing.

Here’s why. This fall has been a relatively slow season for many county business people, especially in comparison to the last three boom years. Yes, in relative terms, that period after COVID for the county was a boom time. Just take a look at the consecutive years of positive sales tax increases year after year. Consumer activity was definitely on the rise for the last few years, especially here in the mountain resort counties like Grand County.

That’s why we had inflation. Demand was up for our services and products up here while supply was down. And yes, there is a supply side in the service sector. Service is something like a commodity up here and service was hard to come by, mainly because there simply aren’t enough employees up here to meet demand.

When that happens, the cost of the service goes up, whether it’s in a restaurant, a room-cleaning service, construction services or even government services. Hence the inflation we’ve been seeing. When it comes to price increases we’ve seen in stores, that’s not so much a local issue as it is a factor of national chains, producers and distributors facing these similar demand and supply issues.

And remember, real estate and construction are key aspects of our local economy here in Grand County and both have been facing these supply and demand pressures. People aren’t willing to sell homes that have low interest rates and yet builders are struggling to meet the demand for new homes.

And yet we have a housing crisis taking place here, as throughout Colorado, where there simply aren’t enough affordable homes. That drives the scarcity in workers and that then drives higher prices in the service sector.

And yet now I think there’s light at the end of the tunnel of worry about recession. I think inflation is going to continue to recede, mainly because gasoline prices are going to continue go down and stabilize at the lower point. This is because the U.S. is producing record amounts of oil and too many new oil-producing nations dependent on oil revenue aren’t willing to cut production just to raise prices. There will be lots of oil out there, driving prices down.

Granted, Putin and Arabs want the prices to go up but I think we are in a downward price pattern for now.

There you have it. No recession, we get a soft landing and the economic climate in Grand County in 2024 will be much like it has been in 2023.

The only big dark spot on the financial horizon relates to something over which we really don’t have much control. If we don’t get some good snowfall pretty soon my guess is that will cut into our winter tourism revenues.

So pray and dance for snow. Those flakes are just like money falling from the sky.

Patrick Brower is the Enterprise Facilitator for the Grand Enterprise Initiative. He offers free and confidential business management coaching to anyone who wants to start or expand a business in Grand County. He is also the author of “KILLDOZER: The True Story of the Colorado Bulldozer Rampage.” He can be reached by calling 970-531-0632 or at patrickbrower@kapoks.org.