A recession might not be inevitable, according to the 2023 Glenwood Springs Economic Forecast and State of the Community presentations on Monday

With the looming possibility of a recession, “the labor market might stave off a recession,” keynote speaker Nathan Perry, PhD, associate professor of economics at Colorado Mesa University, said during the annual Glenwood Springs Chamber-sponsored event.

“This has been the most drawn-out looming recession of my career,” Perry said, showing how the inverted yield curve has dropped to its lowest. “We can’t get any lower now. It could be different demographics, though.”

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When treasuries or government bonds drop that low, they are usually filled by a recession, he explained. But the current strong workforce is an outlier that doesn’t usually happen with these drops. 

The national unemployment rate is 3.4%, which is the lowest it’s been since 1969, Perry said. 

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When he met with the Governor Jared Polis’ office, he said no one there was convinced the country would see a severe recession. He does think unemployment will go back up to 4% or 5%, but not high enough for a bad recession. The unemployment rate in Colorado is 2.8%, according to the Colorado Department of Labor and Employment.

“I think the slowdown is inevitable,” he said. “What I don’t think is inevitable is 6% or 7% unemployment.”

Growth is another subject he is not concerned about. He doesn’t think growth will happen the way it has been projected by current numbers. He said Garfield County has a high birth rate and a low death rate, with people moving into the region from other places.

He thinks the people moving to the county is a trend that will keep slowing as people find other desirable locations to move for a lower cost of living. 

“I’m not sure the trend can continue with people immigrating into Colorado,” Perry said. 

Gross Domestic Product in Garfield County saw its last big spike from oil and gas in 2017 and has severely dropped since 2020. He said that oil and gas is a big contributor to that, and although other industries are doing much better since 2020, oil and gas changes show the biggest monetary changes for GDP. 

“Any county that’s relied on tourism, or relied on energy,” he said, “is just catching up to 2019 right now, and that’s the case with Garfield County.”

The oil and gas industry is also having trouble finding people to work on the rigs or gain permits, while the price of gas has also dropped significantly, Perry said. 

The employee cost index went up dramatically from the second half of 2020, which he said is a large factor in inflation, he said. 

“For employers, it’s been rough,” Perry said. “A lot of small businesses are struggling, a lot of big businesses, too.”

He said that the work force shrunk after the COVID-19 pandemic, for different reasons. Baby Boomers decided to retire or leave the workforce, and Millennials have also been leaving the workforce to possibly raise families. And, there was a high death rate during 2020. 

“We have those people out of the labor force and we have this national demographic issue where there are just less people available to work and it’s just kept the labor market really strong,” he said.

He joked that he tells his students to ask for the moon when they job hunt because they can get whatever they ask for right now. Wages also rose for almost all industries except utilities, he said. 

People are being paid more but housing is still an issue. Perry joked that when there’s a housing bubble in Colorado, he calls the housing bubble here a “double bubble.” It doesn’t sound like the housing market will be affected here. 

Watkins Fulk-Gray, senior planner for Glenwood Springs spoke about the city’s efforts on thet housing front. 

“One in three households in Glenwood Springs is house burdened,” he said, explaining that those people who are burdened pay more than 30% of their income on housing. 

Fulk-Gray went on to explain what the city has done to accommodate more affordable housing, by year:

• 2016 Voluntary Deed Restriction Program
• 2018 Development Code Rewrite
• 2019 Vacation Rentals Regulations
• 2020 Accessory Dwelling Units
• 2021 Inclusionary Zoning
• 2022 Affordable Housing Tax 
• 2022 West Mountain Regional Housing Coalition
• 2022 Habitat for Humanity Project
• 2022 Motel-Residential Conversions
• 2023 Inclusionary Housing Percentage Update

Round Table with Garfield County leaders

The forum ended with a round table discussion among area leaders, including Beverli Marshall, Glenwood Springs city manager; Tom Jankovsky, Garfield County commissioner; Brendan Matthias, executive vice president, FirstBank – Roaring Fork Valley; Matt Gianneschi, chief operating officer and chief of staff, Colorado Mountain College; and Stacey Gavrell, chief community relations officer, Valley View Hospital. 

It was moderated by Mike Mercatoris, Slifer, Smith & Frampton Commercial & Entrepreneurial Real Estate.

They were all asked how they address workforce shortages, handle housing, and other questions like rising costs of supplies and materials. 

Each speaker had points where they were able to echo their struggles with what was presented by Perry. Whether it was the cost of supplies at the hospital or the cost for the city to build anything, they have had to make adjustments. 

Jankovsky talked about housing and low employment, even though unemployment is also very low. He talked about housing stock and the race to build enough housing to accommodate the population.

Marshall talked about city projects and how the cost of construction and fewer workers has made it hard for the city to complete projects at their original budget price and looking at ways to recover costs.

“We’re really having to do a tight rope walk, and I don’t think it’s going to get better,” Marshall said.

Gavrell mentioned a shortage in employees, especially after the pandemic because people are not respectful of health care workers anymore for some reason, she said. 

Post Independent reporter Cassandra Ballard can be reached at cballard@postindependent.com or 970-384-9131.