Trends

September 16-29, 2021 The Business Times News page 15 Trends

INDICATORS AT A GLANCE n Business filings Contributors s New business filings in Colorado, 39,252 in the second quarter, up 25.7% from the second quarter of 2020. Opinion n Confidence t Consumer Confidence Index 113.8 in August, down 11.3 s Leeds Business Confidence Business Briefs Business People Index for Colorado, 67.3 for the third quarter, up 2.9. s National Federation of Independent Business Small Almanac Business Optimism Index 100.1 for August, up 0.4. n Foreclosures t Foreclosure filings in Mesa County, 6 in August, down from 4 in August 2020. t Foreclosure sales in Mesa County, 0 in August, down from 2 in August 2020. n Indexes s Conference Board Employment Trends Index, 110.37 for August, up 0.48. s Conference Board Leading Economic Index 116 for July, up 0.9%. s Institute for Supply Management Purchasing Managers Index for manufacturing, 59.9% for August, up 0.4%. n Lodging s Lodging tax collections in Grand Junction, $237,328 for July, up 119.7% from July 2020. n Real estate Index up, but so are small business concerns A measure of optimism among small business owners has s Real estate transactions in Mesa County, 544 in August, up 0.37% from August 2020. s Dollar volume of real estate transactions in Mesa County, $221 million in August, up 39.9% from August 2020. increased, but so have concerns over labor and supply chain issues. “As the economy moves into the fourth quarter, small business owners are losing confidence in the strength of future business conditions,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business. “The biggest problems facing small employers right now is finding n Sales enough labor to meet their demand and, for s Sales and use tax collections in Grand Junction, $6.5 million for July, up 22.7% from many, managing supply chain disruptions.” The NFIB reported its Small Business Optimism Index rose four-tenths of a point July 2020. to 100.1 in August. The index is based on the results of monthly s Sales and use tax collections surveys of members of the small business advocacy group, most in Mesa County, $4.2 million of them small business owners. for August, up 15.7% from For August, five of 10 components of the index advanced, August 2020. four declined and one remained unchanged. n Unemployment The proportion of those responding to the survey upon which the August index was based who expect the economy to t Mesa County — 6.3% for improve in coming months fell eight points. At a net negative t Colorado — 6.1% for July, down 0.1. July, down 0.6. 28 percent, more respondents expected worsening conditions. The component has dropped 16 points over the past two months to its lowest level since 2013. t United States — 5.2% for August, down 0.2. A net 30 percent of owners reported plans to increase capital outlays in coming months. That’s up four points from July, but

Real estate numbers mixed

Residential sales slip, but overall dollar volume gains biggest in 16 years

Phil Castle

The Business Times

Robert Bray believes a slight pause in residential real estate sales in Mesa County in August could bode well for subsequent activity by replenishing low inventories.

“It’s an encouraging time for buyers,” said Bray, chief executive officer of Bray Real Estate in Grand Junction.

Meanwhile, increased commercial sales and higher prices have pushed year-over-year gains in dollar volume in Mesa County to their highest levels in 16 years, said Annette Miller, administrative coordinator at Heritage Title Co. in Grand Junction.

Miller said 544 real estate transactions worth a total of $221 million were reported in Mesa County in August. That’s only two more transactions than the same month last year, but $63 million more in dollar volume.

Just 25 transactions accounted for a combined $48 million, Miller said. They included the sale of the 1,720-acre Grove Creek Ranch in the Collbran area for $6.3 million, a strip mall on Horizon Drive in Grand Junction for $3.3 million and a commercial truck center in Fruita for $2.8 million.

Through August, 4,201 transactions worth a total of more than $1.5 billion were reported in 2021. Compared to the same span last year, transactions increased 19.7 percent and dollar volume rose 42.8 percent.

The proportional gain in dollar volume was the largest since a 25.6 percent increase in year-end dollar volume from 2004 to 2005 and the midst of a natural gas development boom in Western Colorado, Miller said. “We’ve got quite a bit of commercial and also price appreciation driving that.”

If the current pace of sales continues, 2021 would end with still historically weak. A net 10 percent said they consider now a good time to expand, down three points. A net 32 percent of those responding to the survey reported plans to increase employment, up five points from a month ago. A net 50 percent reported unfilled job openings, up a point to a record high for a second consecutive month. Asked to identify their single most important business problem, a record 28 percent cited quality of labor and 8 percent labor costs. A net 41 percent reported raising compensation, up three points to a record level. A net 26 percent said they plan to raise compensation in the next three months, down a point from a

Bill Dunkelberg record-high reading in July. The share of those who said they expect higher sales rose two points. But at net negative 2 percent, more said they anticipated lower sales. The proportion of those reporting higher earnings fell two points to a net negative 15 percent. Among those reporting lower earnings, 34 percent blamed higher material costs, 27 percent cited weaker sales and 9 percent attributed the change to labor costs. For those reporting higher earnings, 60 percent credited increased sales and 10 percent higher prices. A net 11 percent of respondents reported plans to increase inventories, up five points. A net 11 percent said they consider their current inventories too low, down a point from a record reading in July. F

6,301 transactions worth a total of nearly $2.3 billion. Real estate activity peaked in Mesa County with 7,198 transactions in 2005 and $1.72 billion in dollar volume in 2006. According to numbers Bray Real Estate tracks for the residential market in Mesa County, 318 transactions worth a total of $122 million were reported in August. Compared to the same month last year, transactions decreased 19.1 percent and dollar volume declined 9 percent. “Buyers were taking a little pause,” Bray said. Some were likely discouraged by low inventories and competition for those homes on the market, he said. Year-to-date residential activity in 2021 outpaces 2020, however. Robert Bray Through August, 2,740 transactions worth a combined $994 million were reported. Compared to the same span last year, transactions increased 5.9 percent and dollar volume rose 25.2 percent. At the end of August, there were 400 active listings. That’s a decrease of 7.2 percent from the same time last year. However, more than 400 new listings have come onto the market in each of the last four months. Bray said he expects inventories to rebuild and offer more selections to buyers. At the same time, new construction has increased. Through Annette Miller August, 672 building permits for single family homes were issued in Mesa County in 2021. That’s an increase of 35.7 percent over the same span last year. Low supplies and high demand have pushed prices upward. The median price of homes sold during the first eight months of 2021 increased 16.1 percent to $325,000 compared to the same span in 2020. Bray said the market remains strong. “It’ll still be a good year in real estate.” Meanwhile, property foreclosure activity continues to decrease. Miller said 19 foreclosure filings and 13 sales were reported during the first eight months of 2021. That’s down 75.3 percent and 43.5 percent, respectively from the same span in 2020. The seven resales of foreclosed properties were a fraction of all transactions and the 10 percent threshold Miller considers indicative of a healthy market. F

Labor report: Payrolls up, unemployment rate down

U.S. payrolls continue to grow even as the unemployment rate drops.

Nonfarm payrolls increased 235,000 and the jobless rate decreased two-tenths of a point to 5.2 percent in August, according to the latest estimates from the U.S. Bureau of Labor Statistics.

Still, the latest payroll increase was less than half the average monthly gain of 586,000 so far this year.

Estimated payroll gains for July and June were revised upward a total of 134,000 to 1,053,000 and 962,000, respectively.

Payrolls have grown 17 million since April 2020, but remain 5.3 million below the pre-pandemic level in February 2020.

For August, 8.4 million people were counted among those unsuccessfully looking for work. Of those, 3.2 million have been out of work 27 weeks or longer.

Another 4.5 million people were counted among those working part-time because their hours were reduced or they were unable to find full-time positions.

The labor participation rate remained unchanged at 61.7 percent, still 1.6 points lower than February 2020.

Employment increased 74,000 in business and professional services, with gains in architectural, engineering and computer firms.

Payrolls rose 53,000 in transportation and warehousing and 40,000 in private education. Manufacturers added 37,000 jobs, while payrolls rose 16,000 in financial activities. Employment decreased 29,000 in retail trades and was little changed in the leisure and hospitality, construction and health care sectors.

The average workweek remained unchanged for a third straight month at 34.7 hours. The manufacturing workwork shortened two-tenths of an hour to 40.3 hours.

Average hourly earnings rose 17 cents to $30.73, the fifth consecutive month for gains.

Labor index rises

An index tracking labor trends continues to increase, signaling job growth in the months ahead.

The Conference Board reported its Employment Trends Index rose nearly a half point to 110.37 in August. The index has increased for six straight months, although the rate of gains has slowed.

An increase in COVID cases could slow economic and job recovery, said Gad Levanon, head of the Conference Board Labor Markets Institute.

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Consumer Confidence Index drops

A measure of consumer sentiment has dropped to its lowest level in six months on less upbeat assessments of business and labor conditions.

The Conference Board reported its Consumer Confidence Index fell 11.3 points to 113.8 in August. That’s the lowest point since the index stood at 95.2 in February. “Concerns about the Delta variant and, to a lesser degree, rising gas and food prices resulted in a less favorable view of current economic conditions and short-term growth prospects,” said Lynn Franco, senior director of economic indicators at the Conference Board. “While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead,” Franco said. Lynn Franco The business research and membership group bases the index on the results of monthly household surveys. Consumer spending accounts for more than two-thirds of economic activity.

Less upbeat assessments of current conditions pulled down the present situation component of the index 9.9 points to 147.3.

The proportion of consumers responding to the survey upon which the August index was based who described business conditions as “good” declined 4.7 points to 19.9 percent. The share of those who characterized conditions as “bad” advanced four points to 24 percent.

The proportion of consumers who called jobs “plentiful” fell six-tenths of a point to 54.6 percent. The share of those who said jobs are “hard to get” rose seven-tenths of a point to 11.8 percent.

Less upbeat outlooks pulled down the expectations component of the index 12.4 points to 91.4.

The share of consumers who said they expect business conditions to improve over the next six months fell eight points to 22.9 percent. The proportion of those predicting worsening conditions rose 5.9 points to 17.8 percent.

The share of consumers who expect more jobs to become available in coming months decreased 2.5 points to 23 percent. The share of those anticipating fewer jobs increased eight-tenths of a point to 18.6 percent. F