La Plata County is far from immune to the ravages caused by the failed national economy, but so far, it has suffered less than the state as a whole and the nation. Perhaps that is only fitting as overreaching mortgages, which have the world economy still looking for a bottom, were only a very small part of this area's real estate transactions.
At Friday's annual state-of-the-economy forum sponsored by Wells Fargo Bank and Fort Lewis College, the national presenter said he was looking hard for good news. For Colorado, and especially this county, there was better news to work with. It was made clear that although most state analysis was timely, it could turn out to be optimistic. Recent weeks have produced a steady stream of negative news, and at least the first three quarters of 2009 very likely will be worse.
When volatility and uncertainty exist in the economy, as they do now, people pull in and refuse risk.
It has been a time of "wealth destruction," said Wells Fargo Bank senior economist Scott Anderson, who is based in Minneapolis, with real estate values dropping $2.5 trillion and equities $2.7 trillion and with more decreases to come. On the plus side, Colorado has coal and, particularly, natural gas (and Southwest Colorado this winter has snow). Colorado has taken a lead in emphasizing renewable and green energy, which are the future. The state has great physical appeal, and it is a place that attracts entrepreneurs. When times are difficult, people are creative and establish new businesses; that ingenuity fuels a more dynamic economy.
That Colorado has an asset in being a large beer producer got a chuckle from the crowd.
Fort Lewis College assistant professor Luke Miller described the generally slight decreases in La Plata County's economic categories, and contributed anecdotes and analysis to the discussion. Migration - which has benefited Colorado - will slow as it does when times are difficult. People tend to stay put. Colorado's unemployment rate will be two percentage points or so more favorable than the national rate, but both still are short of their estimated maximums. Expect a loss of 7,000 to 10,000 jobs in Colorado eventually.
Professional and business services professions will lose jobs, as will the leisure industry. The construction industry already has, heavily. Colorado state government has frozen hiring, but health care will offer opportunities.
While personal income in La Plata County has increased from 70 to 80 percent of the state average since 2001, and natural gas is generating taxes, royalties and wages, part of the real estate market is tied to national markets. Those wanting to come to Durango cannot make the move if they cannot sell the house they are in now. Richard Wobbekind of the Leeds School of Business at the University of Colorado pronounced the unstable and now reduced gasoline prices as not being favorable for Colorado's alternative energy initiatives, and he emphasized that federal stimuli should be used to make the country more productive. Putting more resources into education has done that in the past and will again, he suggested. And while inflation may eventually become a threat with so much money in circulation, right now the need is to get the economy moving again with federal spending.
Colorado still is a very good place to be, even in a recession.