La Plata County’s economy will likely face some challenges in the coming year, but the state is looking forward to continued strong growth.
“There could be some downward pressure – I wouldn’t go so far as to say we’re heading into a recession, but I’ll know more in a year,” economics Professor Robert “Tino” Sonora, told the crowd at the 25th annual Southwest Business Forum at Fort Lewis College.
Wages adjusted for inflation seem to be somewhat stagnant, limiting buying power. This may be because many people are employed in the service industry, he said.
Oil and gas prices also are not likely to rebound much next year, he said, and may remain below $60 a barrel.
The number of people boarding planes in at the Durango-La Plata County Airport has dropped and government spending in the region has slowed.
However, there are reasons for tempered optimism, he said
The population is growing, tourism is strong and the unemployment rate in La Plata County is about 2.5 percent.
Across the state, the outlook is positive in almost every sector except mining and agriculture, said Richard Wobbekind, senior associate dean at the University of Colorado.
“We continue to be a very strong state,” he said.
Population and employment growth have been strong and population declines in rural areas have slowed, he said.
However, the state saw more job losses because of the slowdown in oil and gas was more harsh than expected.
In 2016, employment in mining fell 25 percent to 23,200 jobs, according toCU’s Colorado Business Economic Outlook.
But in 2017, the report predicts only a 0.9 percent loss in mining jobs.
An uptick in oil prices is expected to stabilize the industry and encourage more companies to drill.
“We have seen a pickup in rig count, and we think we will see additional pickup in rig count. It’s slow, and it’s small, but it’s going in right direction,” he said.
The agricultural sector is expected to see lower profits in 2017 because beef prices have fallen steeply.
However, many other sectors including housing construction, tourism, heath care, manufacturing and renewable energy are strong.
Colorado also continued to be the top skiing destination in the nation during the 2015-16 season, and the industry continues to grow.
“We are pleased we are able to take away, garner if you will, market share,” Wobbekind said.
While the economic outlook for Colorado is largely bright, much uncertainty surrounds changes President-elect Donald Trump’s administration might make.
Business confidence rose sharply after the election, according to a report released this week by CU Leeds School of Business.
This is in line with national surveys, said Tim Quinlan, a vice president and economist with Wells Fargo.
“There is certainly some pent up frustration in the business community over regulation and the Affordable Care Act,” he said.
However, a campaign promise to increase public spending on infrastructure at a time when the nation is close to full employment may not make sense. Usually governments boost this kind of spending during a recession.
“I’m not sure it’s the right time for those sorts of measures,” he said.
At the same time, global markets seem to be improving, which is positive.