Steamboat economist weighs recession

Ford: Routt County likely fared better than most during the worst of times

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If you go

What: Economic Summit 2010, “A New Decade: Emerging from Recession in a Changed Environment”

When: May 19 and 20

Where: The Steamboat Grand

Contact: Visit the Economic Summit 2010 site for a schedule, information on speakers and registration information

— A diverse economy allowed Routt County to weather the worst of the recession better than most areas, a local economist said Tuesday, adding that financial forecasts appear to be brightening.

Scott Ford, director of the Routt County Economic Development Cooperative, has been compiling data from local, state and federal sources in recent weeks to raise economic awareness across the county. What he’s found, he said Tuesday, is that “a certain degree of resilience exists in this economy” because of its variety of industries and income sources. As an example, Ford cited the construction industry, which has taken a hit in Routt County and across Colorado. But other economic sectors performed much better in Routt County than other areas of the state, Ford said, having a stabilizing affect on local average incomes.

Those other sectors include health care; scientific and technical services; and nonlabor income such as dividends, rents, transfer payments — including government programs such as Social Secur­ity and Medicaid, Ford said — along with private pensions, interest and royalties. Nonlabor income accounted for 33 percent of the county’s total personal income in 2008, according to figures from the federal Bureau of Economic Analysis and Bureau of La­­bor Statistics.

The remaining 66.7 percent of in­­come, Ford said, is labor-related and split into incomes from private entities and public entities such as the Steamboat Springs School District. Of the private earnings, Ford said, construction trades generated about 26 percent of personal income in 2008, followed by retail trades at 10.5 percent, health care and social assistance at 8.8 percent and accommodation and food services at 7.6 percent.

That relative balance indicates a diverse economy and a relatively stable source of incomes countywide, he said.

“Routt County’s aggregate personal income for 2009 will likely be at least flat or more likely show a modest increase of 1 to 1.5 percent (over 2008),” Ford wrote in an e-mail. “If we assume that 2009 represented the bottom or close to the bottom of the current recession, the takeaway from this information is that at the county level we will have weathered the challenges this recession has delivered better than the rest of the state and far better than many places in the nation.”

That’s in contrast to places such as Rio Blanco County, which is heavily reliant on energy industries and lost 21 percent of its jobs and 10 percent of its average weekly wages from 2008 to 2009, according to federal labor statistics.

Personal in­­come levels de­­creased about 2.1 percent across Col­­orado in 2009 com­­pared to 2008, according to BEA figures released last week. The BEA’s county-specific figures for 2009 incomes are not yet available.

Ford acknowledged the struggles of many families and workers in Routt County and said it’s not his intent to minimize the recession’s impacts.

“Economies are made up of people. There are happy stories and tragic stories behind every number,” Ford said.

Brian Bradbury, labor and employment specialist at the Steamboat Springs office of the Colorado Workforce Center, said Tuesday that the local labor market has not noticeably improved during the past year and remains very sluggish.

“The number of jobs is very low, and the number of job seekers is very high,” Bradbury said. “We really don’t see much of a change right now.”

There’s also no change in the number of new unemployment claims, which remains steady at his Sundance at Fish Creek office, Bradbury said.

‘Not as dark’

Ford said according to figures from Gallup International Association, Yampa Valley consumers spent an average of $98 per day as of Aug. 15, 2008. That number dipped to $60 per day as of April 28, 2009, but increased slightly to $67 per day as of April 20 this year.

That’s one of several indicators that leads Ford to think brighter days are ahead.

“All things being equal … 2009 will probably go down as the darkest of the days,” Ford said. “That doesn’t mean it’s sunshiny (now), but it’s not as dark.”

He is projecting that in terms of retail sales and the state of the local economy, “2010 will look a lot like 2006.”

It could be five to seven years before construction levels return to the booming levels of 2007 and 2008, he said.

Economic projections and climate will be among many topics on the table next week at Economic Summit 2010, titled “A New Decade: Emerging from Recession in a Changed Environment.” The event is May 19 and 20 at The Steamboat Grand.

Sandy Evans Hall, executive vice president of the Steamboat Springs Chamber Resort Asso­ciation, said Tuesday that about 170 people had registered for the summit, which she said can accommodate “upwards of 250.”

“I think the level of speakers is going to be inspiring and fun and interesting and educational,” she said. “I think it’s going to be a really good summit.”

— To reach Mike Lawrence, call 871-4233 or e-mail mlawrence@steamboatpilot.com

Comments

Scott Wedel 4 years, 6 months ago

Did he really say 5-7 years before construction returns to 2007/2008 levels? Maybe 5-7 years before it returns to a more normal level of like 2003 to 2005. 2007/8 was such a crazy boom that those levels would not be sustainable without a far larger population base. We had huge demographic trends filling the sails of the 70s and 2000s booms (young baby boomers seeking resort lifestyle and retiring boomers seeking resort lifestyle) and I do not see another powerful demographic trend to push us into a future boom. Well, maybe after America's sweethearts Bianca Jimenez and Chifei Wang win 3 golds in the 2026 Olympics then the demographics might favor winter sports again.

We are the sort of place where a highly paid person (say $500K a year) buys a mansion and calls it home while 10 locals averaging $40K a year lose their jobs and an economist would cite the economic development of an additional $100K of income to the valley. Look at the 10% reduction in the number of jobs and then try to say that we fared better than the rest of the state. Rio Blanco got creamed and thank God we did not get hit that bad. But figuring in the jobs lost number, we got hit far closer to average statewide numbers than we would probably like to believe.

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freerider 4 years, 6 months ago

I know people that have lived here for 30 plus years that are leaving town by the truck load because they can't find work....and the real estate inventory has gone from 3-5 years to 5-7 years and now I'm hearing 7-10 years of inventory ...maybe longer . The un-employment numbers are misleading because a lot of the un-employed have left town . Growth growth growth to make more money money money .... growth on this planet is like a cancer to the earth ....catch 22 no growth = bad economy too much growth = we kill the planet

have fun while you can because nobody can stop the cancer cell ......smart people are not having kids anymore while the idiots at the trailer parks are breeding like rabbits

the planet is getting dumber by the day . hey they elected Dubya ...I rest my case !!!

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housepoor 4 years, 6 months ago

The extended unemployment is huge factor in the valley, I know of at least a dozen of people who have been collecting for 8+ months, not sure they are even looking for a job as unemployment pays better than most jobs in the paper.

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John Fielding 4 years, 6 months ago

Scott

You noted that construction contributed 26% in 2008. What did that figure decline to last year?

.

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Scott Wedel 4 years, 6 months ago

The 10% fewer jobs is not some number pulled for thin air. That is in the employment numbers. Our employment number is not so bad because the workforce has also decreased. From number of ads advertising apts/condos for rent, it is probable that hundreds of people have left the valley.

I think some high income people moving here is also in the numbers because average income increased as number of jobs decreased.

There are real estate market segments that have a 7-10 year supply, but some segments might have closer to a 5 year supply. So I think there will be a construction recovery in about 5 years building into the part of the market that has tighter supply.

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Steve Lewis 4 years, 6 months ago

I truly appreciate what Scott Ford contributes with his study of the numbers out there. I also love it that he is an eternal optimist. The summation of the industry sectors is helpful info, but I agree the real estate/construction forecast is pie in the sky.

2010 equals 2006? Michael Hurley, a realtor arguing against local housing regs in 2008, noted that "anyone could make a project go in 2006-2007". And he was probably right. That sure doesn't sound like the 2010 that I'm living in.

I won't suggest the Pilot needs to print pessimism, but in my opinion this paper's eternal optimism for real estate demand has already proven itself as counterproductive counsel for this community.

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ybul 4 years, 6 months ago

Get 10 economists together and ask them to look into their crystal balls as to where we are headed and you will get 20 answers.

The road a hoe is one that has not been travelled before. Putting ones own house in order is the right thing to do. If only our governing bodies would do the same. Mr Roberts has done a good job here recently, I hope he makes a good decision if he is going to guarantee the URA's bonds with City revenue, in case the real estate market continues to implode. Who knows if it will happen or not.

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housepoor 4 years, 6 months ago

As far as the real estate market goes, yahoo has 50 properties listed as banked owned or have recieved notice of default and that's most likely low.

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