Trends

June 23-July 6, 2022 The Business Times News Page 19 Trends

INDICATORS AT A GLANCE n Business filings Contributors t New business filings in Colorado, 43,780 in the first quarter, down 2.1 percent from the first quarter of 2021. OpinionPhil Castle The Business Times Business Briefs Business People n Confidence t Consumer Confidence Index 106.4 for May, down 2.2. t Leeds Business Confidence Index for Colorado, 53.9 for the second quarter, down 4.1 t National Federation of Independent Business Small Business Optimism Index 93.01 for May, down 0.1. The unemployment rate continues to edge down in Mesa County as labor demand remains strong across most industries. But the effects of broader economic forces — rising inflation and interest rates among them — could become more evident in the local market during the second Almanac half of the year, said Curtis Englehart, n Foreclosures director of the Mesa County Workforce s Foreclosure filings in Center in Grand Junction. “We’re definitely Mesa County, 16 in not immune to that.” May, up from 2 in For now, Englehart said he’s cautiously May 2021. optimistic as local indicators remain strong. t Foreclosure sales in The seasonally unadjusted unemployment rate slipped to Mesa County, 0 in 3.3 percent in May, according to the latest estimates from the May, down from Colorado Department of Labor and Employment. That’s down 2 in May 2021. a tenth of a point from April and a jobless rate that was revised n Indexes higher to 3.4 percent. In May 2021, the rate stood at 5.8 percent. Between April and May, Mesa County payrolls declined t Conference Board Employment 92 to 75,721. But the number of people counted among those Trends Index, 119.77 for May, down 0.83. t Conference Board Leading Economic Index 118.3 for May, down 0.4%. s Institute for Supply Management Purchasing Managers Index for manufacturing, 56.1% for unsuccessfully looking for work declined more — 106 to 2,544. The labor force, which includes the employed and unemployed, shrank 198 to 78,265. “Overall, I’d say May was a pretty strong month,” Englehart said. The labor force has declined two consecutive months — which Englehart said doesn’t yet raise alarms, but is worth watching. May, up 0.7%. Over the past year, payrolls have increased 3,382, a gain of nearly 4.7 percent. The ranks of the unemployed dropped 1,927. n Lodging The labor force grew 1,455. s Lodging tax collections in The labor market remains tight, Englehart said, with continued Grand Junction, $411,158 demand across all industries. But the applicant pool has deepened for April, up 84.1% somewhat and more people are filling jobs, he said. from April 2021. The number of job orders posted at the Mesa County n Real estate Workforce Center has dropped on a year-over-year basis compared to what he described as crazy demand in 2021. “The demand was

Unemployment rate slips

But rising inflation and interest rates expected to affect Mesa County AREA JOBLESS RATES outpacing the supply at such a pace.” For May 2022, 727 job orders were t Delta County n Garfield County t Mesa County t Montrose County t Rio Blanco County May April 3.1 3.3 2.7 2.7 3.3 3.4 2.9 3.3 3.6 3.8 posted. That’s a decrease of almost 38 percent from May 2021. Through the first five months of 2022, 4,106 orders were posted. That’s a decline of nearly 9 percent from the same span in 2021. Looking ahead, Englehart said he expects the jobless rate to jump in June — a spike attributed to high school and college graduates entering the work force who haven’t yet found jobs. Afterward, Englehart said the jobless rate could edge down further as the weather warms and seasonal employment increases in several industry sectors.

Curtis Englehart The effects of higher prices and interest rates still could affect the Mesa County market, however. It’s already become more expensive for people to commute to jobs in Mesa County and seek mortgages to buy homes, he said. Seasonally unadjusted unemployment rates also dropped in neighboring Western Colorado counties between April and May — two-tenths of a point to 3.1 percent in Delta County and 3.6 percent in Rio Blanco County and four-tenths of a point to 2.9 percent in Montrose County. The jobless rate held steady at 2.7 percent in Garfield County. The statewide seasonally adjusted unemployment rate edged down a tenth of a point to 3.5 percent, the lowest level since the rate stood at 2.8 percent in February 2020 and just before the onset of the COVID-19 pandemic in the United States. Nonfarm payrolls in Colorado increased 5,400 between April and May. Over the past two years, the private sector added 414,000 jobs, more than offsetting jobs lost in early 2020 because of the pandemic and related restrictions. Over the past year, nonfarm payrolls increased 124,600 with the biggest gains in the leisure and hospitality; professional and business services; and trade, transportation and utilities sectors. No sectors lost jobs during that period. The average workweek for employees on private, nonfarm payrolls shortened two-tenths of an hour over the past year to 33.7 hours. Average hourly earnings increased $2.86 to $34.62. F

t Real estate transactions in Mesa County, 520 in May, down 5.3% from May 2021. s Dollar volume of real estate transactions in Mesa County, $236 million in May, up 27.6% from May 2021. n Sales

s Sales and use tax collections in Grand Junction, $6.6 million for April, up 6.6 % from April 2021. s Sales and use tax collections in Mesa County, $4.5 million for May, up 5% from May 2021. n Unemployment

t Mesa County — 3.3% for May, down 0.1.

t Colorado — 3.5% for May, down 0.1. n United States — 3.6% for May, unchanged.

Mesa County tax collections trend upward

Tax collections, one measure of sales activity, continue to increase on a year-over-year basis in Mesa County.

The county collected more than $4 million in sales taxes in May, a 3.4 percent increase over what was collected for the same month a year ago.

May reports reflect April sales.

Sales, use and lodging tax collection reports for the City of Grand Junction weren’t available as of press deadline.

Mesa County also collected nearly $400,000 in use taxes in May — nearly all of that on automobiles purchased outside the county, but used in the county. That was a 24.5 percent gain over the same month last year.

Tax collections on retail sales topped $2.4 million in May, down a tenth of a percent from the same month last year. Collections increased 2.2 percent on general merchandise and 1.9 percent on automobiles, but dropped 1.2 percent on home improvements and 19.1 percent on health and personal care items.

Sales tax collections increased on a year-over-year basis in May in the construction, hotel and restaurant, manufacturing and telecommunications categories.

Through the first five months of 2022, Mesa County collected more than $19.1 million in sales taxes. That’s an increase of almost $2 million and 11.2 percent over the same span in 2021.

The county collected almost $1.8 million in use taxes through the first five months of 2022, a 16 percent gain from the same span last year.

Year-to-date collections on retail sales exceeded $11.7 million, a 6.4 percent increase fueled by gains on automobiles, general merchandise, home improvements and sporting goods. Collections edged down on the sale of foods and beverages.

Year-to-date sales tax collections also increased in the construction, hotel and restaurant, manufacturing telecommunications and wholesale categories.

MESA COUNTY TAX COLLECTIONS

May 2022 May 2021 Change

Use tax $399,455 $320,745 24.5% Sales tax $4,052,764 $3,918,031 3.4%

Total $4,452,219 $4,238,776 5.0%

The Business Times Small business owners less upbeat

A measure of optimism among small business owners has edged down on increasingly pessimistic expectations for the economy. “Small business owners remain very pessimistic about the second half of the year as supply chain disruptions, inflation and the labor shortage are not easing,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business.

The NFIB reported its Small Business Optimism Index slipped a tenth of a point to 93.1 in May.

The index remained below its historical average of 98 for a fifth consecutive month. Expectations for improving business conditions have dropped every month since January.

Tony Gagliardi, state director of the NFIB in Colorado, said the latest index results raise concerns “I can’t remember an equivalent half-year period of upcoming small business anxiety over so many bad economic factors. The fortitude of small business owners will be tested as never before.”

The small business advocacy group bases the index on the results of monthly surveys of members, most of them small business owners. For May, five of the 10 components of the index advanced, four retreated and one remained unchanged.

The portion of those who responded to the survey upon which the May index was based who expect the economy to improve over the next six months fell four points from April. At a net negative 54 percent, the lowest level ever,

more respondents anticipated worsening conditions. A net 25 percent reported plans for capital outlays, down two points. A net 6 percent said they consider now a good time to expand, up two points. A net 26 percent of survey respondents said they plan to increase staffing, up six points. But a net 51 percent reported unfilled job openings, up four points. Asked to identify their most important business problem, 23 percent cited quality of labor and 12 percent cost of labor. Inflation ranked as the most pressing problem of all with 28 percent of the response. A net 72 percent of respondents reported raising Bill Dunkelberg average sales prices, matching the record high reading. Price hikes were most prevalent in the wholesale, manufacturing, retail trades and constructions sectors. A net 46 percent of respondents reported raising compensation, while another 25 percent reported plans to increase compensation over the next three months. Meanwhile, 39 percent of respondents said supply chain disruptions had significant effects on their businesses. Another 31 percent reported moderate effects and 22 percent mild effects. Only 8 percent reported no Tony Gagliardi effects. The proportion of respondents who said they expected higher sales volume fell three points. At a net negative 15 percent, more anticipated lower volume. The share of those who reported higher earnings fell seven points to a net negative 24 percent. Among those who reported lower earnings, 34 percent attributed the trend to higher materials costs, 25 percent cited lower sales and 10 percent blamed labor costs. A net 1 percent of respondents reported plans to increase inventories, unchanged from April. A net 8 percent said existing inventories were too low, up two points. F

Leading index signals slowing growth ahead

An index forecasting economic conditions in the United States continues to retreat, signaling slowing growth ahead.

The Conference Board reported its Leading Economic Index (LEI) decreased four-tenths of a percent to 118.3 in May. With the latest decline, the index has dropped four-tenths of a percent over the past six months.

Separate measures of current and past performance increased in May.

Ataman Ozyildirim, senior director of economic research at the Conference Board, attributed the May drop in the leading index to lower stock prices, slower housing construction and gloomier consumer expectations. “The index is still near a historic high, but the U.S. LEI suggests weaker economic activity is likely in the near term — and tighter monetary policy is poised to dampen economic growth even further.”

The Federal Reserve raised its key interest rate three-quarters of a percent for the first time in nearly three decades as part of an effort to curb inflation.

The Coincident Economic Index rose two-tenths of a percent to 108.8 in May. The index has increased 1.3 percent over the past six months.

The Lagging Economic Index rose eight-tenths of a percent to 112.9. The index has gained 3.7 percent over the past six months.

Ataman Ozyildirim

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