Heading into 2022, many are hopeful for a return to normalcy, but economist Nathan Perry said war in Ukraine could upend Garfield County’s economy for a third year in a row.

During the Glenwood Springs Chamber Resort Association’s annual meeting March 9, Perry presented an economic forecast for Garfield County, explaining that global politics had a significant impact on the economic home front.

“The whole international financial system is unwinding,” Perry explained. “Ukraine changed the narrative.”

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Following an inflation spike in 2021, early forecast models predicted inflation could have held at about 4%, but as the conflict between Russia and Ukraine stretches into its fourth week, Perry said inflation could continue to rise through the year.

“Inflation is going to be bad,” he said. “If this continues, we could see double digit inflation this year.”

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Closer to home, the labor market is looking better going into 2022, but it’s not great.

“Garfield County is doing OK,” Perry said. “But not as well as other counties.”

Although the unemployment rate is declining, the workforce is slimmer than pre-pandemic levels, too.

“That’s because so many people left the labor force during the pandemic,” Perry said.

According to data from the U.S. Bureau of Labor Statistics, the U.S. experienced about 2.4 million “excess retirements” and about 1.8 million women dropped out of the workforce in 2020.

Many people attribute the nation’s current labor crisis to increased unemployment benefits and stimulus packages, but Perry said while both could be contributing factors, the problem still exists months after those benefits were ended.

While Colorado’s labor force participation rate is doing better than the national average, Garfield County was hit harder by the “great resignation,” because the county’s population has a higher percentage of retirement-aged workers, he said.

Despite skyrocketing oil and gas prices, Garfield County’s rig count sits at two. If interest in the county’s oil and gas industry isn’t renewed within the next six months, Perry said he doesn’t anticipate it will recover in the near future.

The arts and entertainment sector provided the forecast with a silver lining after making a significant recovery — returning to about 80% of levels seen in 2019’s fourth quarter, he said.

Following Perry’s presentation, Colorado Department of Labor and Employment spokesperson Carolyn Tucker elaborated on the challenges facing future labor markets.

In 2020, American birth rates declined 4%, a downward trend with roots as far back as the 1960s, Tucker said.

More retirements and less babies could mean the labor force will continue to dwindle for decades. Further complicating the matter, skilled workers are harder to come by each year.

“We’re facing a talent deficit,” Tucker said. “We’re seeing some of our local businesses that rely on skilled labor face some really difficult decisions.”

As the cost of living continues to rise, Perry and Tucker said the future of employment would likely mean increasing wages, offering retention bonuses and employing new recruitment strategies.

Reporter Ike Fredregill can be reached at 970-384-9154 or by email at ifredregill@postindependent.com.