ColoradoCast predicts Colorado economy to continue growth

Now the Colorado Futures Center at CSU predicts the Colorado economy will continue to grow modestly this year. This on the heels of a report from University of Colorado Leeds School of Business that essentially predicted the same thing last December.

But if there’s a prediction of growth, why do things feel a little bit “stuck” up here in the high country of Grand County? The gains of retail sales taxes year-after-year have slowed somewhat compared to two years ago. And it’s still painfully true that high housing costs are forcing unwanted slowdowns in the ability of businesses and public entities in Grand County to grow.

These factors also tend to put the brakes on the ability of people wanting to start new businesses to get out there and start them up.

An article by Aldo Svaldi in the Denver Post puts these contradictions in the spotlight. He writes: “Unemployment is rising but still historically low, jobs remain plentiful in most industries, wages are up and the economy has withstood blow after blow without rolling over. So why does a sense of gloom pervade about where the economy is and where it is headed?”

He writes that we can blame it on “inflation and high housing costs.”

For many people in Grand county the high inflation rate of the past year is abating for goods and services, but not in the realm of high housing costs. In fact, the biggest factor for us in inflation is exactly that: High rent and mortgages. How does this impact our economy’s ability to grow in a place like Grand County?

Let me share an actual anecdote that happened right here in Grand County.  A prominent and popular recreational amenity had hired a new manager more than a year ago. This manager was doing a good job and keeping things humming along at this business. Despite doing well and apparently being happy in the job, this manager decided to quit and has moved out of the county.

Why? Housing costs are too high here and he and his family could not afford to buy a home. Now what’s interesting about this is that this person had potential housing provided as part of the job. But, like most Americans, buying a house and living in it is the start of how we build our net worth over time. He and his family saw they couldn’t make that initial investment in their personal worth due to high prices.

They opted to move. So the business lost a manager. Our local economy lost a family and another house couldn’t be sold to a local worker because it just cost too much.

This sort of employee drain happens with businesses all across the county. This is especially true with what many would call “middle managers,” who tend to be the year-round work horses in many local enterprises. These tend to be people who have made more of a commitment to living and working in the county as opposed to the typical ski bums or worker bees who come here to work for a season or two and don’t mind living in provided housing.

That’s where inflation really hits home locally and where it hurts the most. We have a worker shortage and hence an economy that struggles to meet increasing tourist-based seasonal demand.

It’s the same old story all over again. When I first came here to work in 1979 my job offer depended on me finding a place to live. Housing was scarce then, too, and employers knew it.

But maybe there’s some hope. The tight labor market might be loosening as federal surveys of employers in Colorado, New Mexico and Wyoming found that a smaller share, 25% at the end of 2023 vs. 60% in 2022, plan wage hikes in the next 12 months. Also, fewer are looking to expand their workforce, and some said they plan to shrink it.
So, maybe there’s a glimmer of hope. The ColoradoCast for the first quarter predicts the Colorado economy will continue to grow modestly this year, about 2 % and gain momentum in the coming months.

I just hope the coming months bring “affordable growth.” We will see.

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 pbrower@consultbrower.com.