After record-breaking sales over the Christmas season, the economy slowed down more than normal in Durango.
General city sales tax collections fell from about $1 million last January to $990,682 this January, a 1.5 percent decline, according to city records.
A slew of other economic factors, such as job openings, tourism indicators and permits for new construction fell across the county in January and February, according to data compiled by the La Plata County Economic Development Alliance.
February’s report represented the most declines the Alliance has documented since 2013.
The downturn in the oil and gas industry is likely responsible for the slowdown in the economy, said Executive Director of the alliance Roger Zalneraitis.
The oil and gas industry is starting to turn around, but just as the effects of the downturn were delayed, the effect of the turn around may take a while to filter through to the larger economy, he said.
At one point last year, there were no drilling rigs in the basin and now there are five, he said, in an email.
“I’m hopeful the pickup in activity we’re seeing right now will have a ripple effect,” he said.
If the national economy performs well, the county economy will likely improve over the summer as tourism businesses ramp up, he said.
Lodgers tax collections declined 15 percent in January compared to January 2016, city records show.
The number of people boarding planes at Durango-La Plata County airport also declined 2 percent.
As part of the economic slowdown, job openings fell slightly from 1,552 last January to 1,478 at the beginning of this year. There was a similar decline from 1,734 job openings last February to 1,422 this February, Alliance data showed.
The unemployment rate crept up from 3.2 percent to 3.4 percent. But it is still low, and as a result, the wages in the county increased 4 percent during the first two months of the year compared with the same period last year.
While there were fewer job openings, it is possible available jobs represented sectors such as technology, financial services and health care that have higher wages. One small sector, manufacturing, is doing particularly well, he said.
“We have more people working in manufacturing than any time in the last 11 years,” Zalneraitis said.
The housing and construction sector saw somewhat conflicting trends early this year.
While the average home price and the number of homes sold rose in January and February, new building permits declined. New building permits across the La Plata County declined from 31 in January and February 2016 to 14 during the same period this year.
Demand may be shifting toward existing homes, or the construction industry needs more labor.
There are about 3,000 people working in the construction industry in the county, but it could likely support 3,500 to 4,000 people, he said.
Robert Smith, owner of Buena Vista Builders, said the labor shortage has not changed the number of projects he takes on, but it can slow them down because subcontractors are busy.
However, he expects this year will be strong one for construction.
“This year looks to be as good or better than last year,” he said.
As part of the slowdown in January, downtown businesses saw a 4.6 percent decrease in sales tax collections compared with January 2016, said Tim Walsworth executive director of the Business Improvement District.
“Some businesses said it was a rough January and others said they did just fine,” he said. Sales are generally slow in January, he said.
Data is not yet available to show what industries in the downtown Durango saw declines.
During the same time period, north Durango saw a 14 percent increase in sales taxes, possibly because new businesses including Purgatory’s retail and rental shop and Plate opened, he said.
He expects the new Starbucks on north Main will boost sales taxes more for the area.
“Just as a whole, north Main and north Durango are changing,” he said.
Downtown is also seeing change with new businesses filling up vacancies.
Measured by square footage, vacant retail and restaurant space is down from 4.4 percent at the end of March last year to 2.5 percent.
The space formerly home to the Lost Dog on the 1100 block of Main Avenue and Open Shutter an the 700 block of Main Avenue will soon be filled, so that helped to reduce the vacancy rate, he said.
Sushitarian has also reopened.
“All of this is good news,” Walsworth said.
mshinn@durangoherald.com
