Energy boom fires up western slope economy.

• Author: Adams, Tucker Hart
• Position: [the] ECONOMIST

I recently gave a series of speeches in western Colorado--Montrose, Grand Junction and GlenWood Springs. It was refreshing, after months of negative national and Front Range headlines, to be in a part of the state where the economy is perking along at a satisfactory clip.

I first visited Montrose about 28 years ago, flying into the small airport on a gray overcast afternoon. "Now, don't you folks worry," the pilot assured us. "The cloud cover is pretty heavy, but we're gonna keep circling until a hole opens up and I can shoot the runway." Any numbers person knows that the most dangerous part of the trip is the drive to the airport. But I never fly into the Montrose Airport without remembering that trip.

The population of Montrose County has almost doubled since I was first there--from 24,352 in the 1980 census to an estimated 41,000 today. The county generates more than $1 billion in personal income, for an average per capita income of $27,402 (2005). Annual retail sales also exceeded $1 billion last year, so the county clearly attracts shoppers from surrounding areas, as well as tourist spending. With an average weekly wage of $597 in the third quarter of 2007 (relative to $845 for the state), it is a cost-effective place for a business to locate.

Grand Junction (Mesa County), with an estimated population of 142,462 in 2008, is the regional market center for the energy boom in western Colorado, which is being driven by drilling for natural gas. The county leads the state in employment growth--5.1 percent in 2006 and 5.7 percent in 2007. Retail sales soared 14.4 percent in 2007 on top of a 17.8 percent gain in 2006. With a per capita income of $30,503 in 2006, up 5.7 percent, the city is 217th among metropolitan statistical areas in the United States.

The value of new nonresidential construction contracts surged an amazing 210 percent last year. The tightness of the housing market is reflected in the 1.8 percent apartment vacancy rate.

Glenwood Springs (Garfield County) has the highest per capita income, $32,672, of the three towns I visited. This is 53 percent above what it was 10 years ago. Retail sales have surged at double-digit rates for the last four years. Real estate sales increased 17 percent in 2007 to $1.22 billion. The city has one of the highest hotel occupancy rates in the state. I spent a night in a...