Data shows third of local businesses may have closed due to pandemic
The pandemic’s damage over the last year is only just coming to light in Grand County, where the economy and workforce have been growing over the past decade.
Jessica Valand, director of the Northwest Workforce Area for the Colorado Department of Labor and Employment, gave an annual workforce and economic update to the Grand County commissioners on Tuesday.
The Bureau of Labor Statistics tracked the number of businesses in Grand from 2009 to 2019. The county lost almost 200 establishments in the five years following the 2008 recession, but had been steadily adding since with with 883 registered businesses as of 2019.
The official data for 2020 has not yet come in, but preliminary data shows a significant drop in number of local businesses. However, more time is needed to determine if that impact is short or long term.
Leisure and hospitality were hardest hit by the pandemic, according to Valand, which is notable for Grand. These type of businesses include lodging, restaurants, entertainment and recreation.
“In a community like Grand County, where you have more than your fair share of those establishments, we expect that when we have 2020 numbers on business establishments, we’ll see a decline,” Valand said.
The economic decline was especially apparent looking at monthly unemployment rates for the county over the past year. While the beginning of 2020 saw joblessness below 2%, the county’s unemployment rate spiked to one of the highest in the state in April at nearly 20%.
“Going into the pandemic, we were dealing with historic low unemployment,” Valand said. “We had far more jobs than people able to take them. That has obviously been a really fluid situation over the course of the last year.”
Grand finished out the year with 7.7% of its workforce unemployed, which was slightly below the state average. Even with a higher than usual number of jobless workers, Valand said the service industry is probably still having a hard time filling vacancies.
“What we know is a lot of people feel weary or uncertain about going back into the public-facing service sector right now because of the pandemic, or they might be unable to because of childcare issues or personal health issues,” Valand explained.
The top five occupations in 2020 for the county included food preparation and service, sales, construction and extraction, office and administrative support, and cleaning and maintenance. Valand highlighted construction as a good occupation to have in the county’s top five because wages tend to be higher.
Commissioner Merrit Linke said that with the rebuilding needed in Grand County following the East Troublesome Fire, that industry will likely see a boom for the next couple years.
The county’s average wages from 2009 to 2019 rose by nearly $10,000 to reach $38,099 in 2019, which Valand said was good but likely not enough.
“It’s probably not keeping up with the pace of your housing cost in particular,” Valand said. “It is a high cost of living area, so those average wages are probably not as high as you’d like them to be.”
Unfortunately, the housing market since the pandemic has only worsened the affordability of the area, Valand added. A lack of supply matched with higher demand has driven up the costs of real estate sales throughout the pandemic.
She ended her presentation highlighting financial and economic data from a think tank tracking realtime data from credit card transactions. While the numbers are not perfect, they do give a snapshot of the pandemic’s economic impact.
While consumer spending was slightly up, the data found that the number of open small businesses decreased by 37% last year with small business revenue for places still open dropping 32% over that same time frame.
The drop is striking, but Grand County Economic Development Coordinator DiAnn Butler said she thought the decrease in open businesses from that data set was high. She planned to explore the numbers further.
Butler added that quite a few new businesses have also opened in the past year.
In her update, Butler highlighted the work of the economic recovery task force, which has raised $130,000 for a business stability grant. She said $22,000 of that has already been distributed to 19 businesses.
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Grand County’s real estate transactions May 2-8 were worth more than $63.9 million combined.