Southwest Colorado’s economic engines have recovered from the initial shock waves of the pandemic, but the region remains unaffordable with housing and workforce challenges.
An emerging age crisis also threatens Southwest Colorado’s economy in the coming years.
Fort Lewis College’s School of Business Administration hosted its annual Southwest Economic Outlook on Thursday with presenters sharing a mixed bag for the region and Colorado’s economy.
“Last year, I did some thumbs-up and thumbs-down of how we were performing as a region. This year, I’m not doing that because we really didn’t see any change,” Laura Lewis Marchino, executive director of Region 9 Economic Development District of Southwest Colorado, said in the presentation.
Marchino’s presentation focused on 2020 because 2021 data has yet to be compiled, but it painted a picture of a recovering regional economy with many of the same problems.
Jobs in Region 9, which includes Archuleta, Dolores, La Plata, Montezuma and San Juan counties, decreased by about 2,700 in 2020, bringing the number of jobs to 53,315, which remained above a post-Great Recession low of 50,281 in 2010.
The accommodation and food service industry lost nearly 900 jobs. Government, which includes federal and state positions, lost another 431.
Agriculture was the only industry to record significant gains in the five-county region, adding 138 jobs between 2019 and 2020.
“My guess is that people have been more interested in local food,” Marchino said in an interview. “We have more small farms that are emerging, and with COVID we were getting things that were more local because we were restricted in our travel.”
Region 9’s forecast through 2023 shows jobs recovering and surpassing 2018’s employment peak in 2023.
The Durango & Silverton Narrow Gauge Railroad and Mesa Verde National Park’s quick rebound from the pandemic has also been good news, Marchino said.
Mesa Verde visitor numbers returned to pre-pandemic levels in 2021, and the railroad set a two-decade record for passengers in 2021.
“Our economy was not impacted (by the pandemic) as much as we feared, so that’s the good thing,” Marchino said in an interview Friday with The Durango Herald.
As a state, Colorado remains in the top 10 among states for some positive economic metrics.
“The more recent data that’s come out in the third quarter of the year, we did move fairly significantly,” Richard Wobbekind, a senior economist and associate dean at University of Colorado-Boulder’s Leeds School of Business, said in the presentation.
The state ranked fourth in personal income growth, fifth in per capita personal income growth and eighth in average annual pay from 2020 to 2021.
Colorado also ranked fourth among states in labor force participation rate, Wobbekind said.
However, the news wasn’t all good.
Tourism across the state was down 14.7% in 2020 with a 73% decline in international visitors, he said. Travel-related employment also fell 20.3%, shrinking a key cog in the state and region’s economy.
Tourism likely won’t recover until 2023 or 2024, Wobbekind said.
In Southwest Colorado, housing and affordability continue to impact local economies.
“We all know that we are going to struggle with the workforce moving forward, and we know that we have a housing issue and we know we have an affordability issue,” Marchino said during her presentation.
Region 9 needs 775 housing units to address employment demand through 2023, according to a report by Root Policy Research, Housing Solutions for the Southwest and the Southwest Council of Governments.
The region requires about another 900 housing units annually from 2020 through 2040 to meet the needs of workers and retirees, as well as seasonal and vacation demand.
“We are behind in our housing units,” Marchino said. “When we looked at our industry sectors up to 2008, construction was one of our leading growth drivers in terms of our economy. Since 2008, that has not been the case. We have not been building homes.”
Affordability, which has long been an issue in Durango, but has also plagued other Southwest Colorado communities, continues to be an issue.
Teachers in Region 9 can’t afford homes on their current salaries, Marchino said.
The median home price in Durango is $650,000, requiring an annual income of more than $119,000.
Teachers in the Durango School District 9-R make $49,187 on average.
Livable wages for a family of four with two working adults, which measures the income needed for a decent standard of living, is more than $106,000 in La Plata County, above the statewide average and over the county’s average annual wage.
“As soon as you have children, none of our counties are affordable,” Marchino said.
But the most concerning economic trend is an aging population, she said.
Southwest Colorado’s population is growing progressively older as young people leave the region and the baby boomer generation ages.
Archuleta County was the only county with an under 18 population that stayed the same or grew slightly.
A forecast by the Colorado State Demography Office from October 2021 showed that almost every county in Region 9 will see a shift in its working age population (ages 16-24), San Juan County being the only exception.
La Plata County will see a 10% to 25% change in its working age population by 2030, according to the forecast.
Marchino said the pandemic highlighted the economic challenges of an aging population.
“COVID-19 and all of the focus on workforce shortages brought it more to public attention,” she said in an interview.
At the end of her presentation, Marchino offered areas where the region could improve to spur economic growth and shore up concerns, including attracting and retaining young people and preserving local residential service jobs that root people in communities, such as law enforcement and teaching.
But her concerns about the future of Southwest Colorado’s economy remain.
“I really feel that the aging of our population and the affordability factors are going to be the two things we have to watch because they impact our workforce and our housing,” she said in an interview. “If we’re not affordable, we’re not going to attract the workforce and that’s the crux.”