Market Update: Local economy expected to hold steady in 2026 – The Business Times – Full Analysis

Brandon Leuallen, The Business Times 

Mesa County’s economy is expected to remain stable in 2026, supported by continued diversification and steady business investment. However, it is unlikely to see rapid growth, according to insights shared during the Grand Junction Area Chamber of Commerce’s annual Economic Outlook event on Dec. 15.

Before the keynote forecast, the Grand Junction Chamber recognized several local business expansions, emphasizing the role of existing employers in driving investment and economic activity in Mesa County. Chamber officials reported that, over the course of 2025, the organization recognized $46.03 million in business investments made by existing companies across the county.

Fourth-quarter recognitions included Nightingales Care at Home, which reported a $650,000 investment and the creation of one job; Bray and Company with a $600,000 investment; Valley Plaza with a $1.7 million investment; Natural Grocers with a $3 million investment and five new jobs; Hilltop with a $14 million investment; and River City Sportplex, which reported the creation of 30 new jobs. Additional fourth-quarter honorees included BBSI and Bighorn Consulting, which reported job growth but did not disclose investment amounts.

The keynote forecast was presented by Dr. Richard Wobbekind, senior economist and faculty director of the Business Research Division at the University of Colorado Boulder. Wobbekind told attendees Grand Junction’s economic conditions largely mirror broader state and national trends.

“Colorado, overall, the Colorado economy continues to perform at a positive but slow rate,” Wobbekind said. “And we’re forecasting relatively slow job growth for 2026, a little bit better than 2025.”

Wobbekind said his perspective on Mesa County is also shaped by decades of direct observation. In an interview with The Business Times before the presentation, he said he has been visiting Grand Junction and assessing the local economy since the late 1980s, initially on a more periodic basis, and he has returned nearly every year for more than 15 consecutive years. That long view, he said, makes recent changes in the region’s economic structure particularly clear.

Diversification, investment provide stability

Wobbekind said Mesa County’s diversification has helped reduce volatility compared with past economic cycles. While energy remains an important component of the Western Slope economy, he said growth is now spread across a broader range of sectors.

“I can sort of see the movement away from super energy dependency toward a much more diversified economy over time,” he said, referencing earlier periods when local employment and growth were more vulnerable to energy market swings.

That includes health care, logistics, tourism, education and regional retail, sectors that align with employment patterns seen across Colorado. Wobbekind said Mesa County also benefits from geographic and infrastructure advantages that many other rural areas lack, including interstate access, rail connections and commercial air service.

At the state and national level, Wobbekind said the forecast does not assume a recession. Gross Domestic Product is projected to continue growing, with 2026 expected to be slightly stronger than 2025. Inflation has eased significantly from recent peaks, and personal income has continued to outpace inflation, supporting ongoing consumer spending.

He emphasized long-term economic health depends more on investment than short-term consumption. That theme was echoed by Grand Junction Area Chamber of Commerce President and CEO Candace Carnahan, who said reinvestment by existing businesses remains a key driver of local economic strength.

Wobbekind said current federal tax reforms could provide a short-term boost to the economy, particularly through business tax provisions that encourage investment, but he warned that the long-term effects depend on how those policies are structured. He said tax cuts can stimulate growth initially, especially if they lead to increased capital spending, but they may also contribute to higher federal debt if not offset elsewhere.

“In the short run, it stimulates, and it potentially affects supply by more investment in the economy,” he said.

Wobbekind said Colorado’s recent slowdown and “falling back” from the top of national growth rankings has produced some important benefits, particularly around affordability. He said rapid growth in previous years pushed housing prices and costs higher at an unsustainable pace, and the recent cooling has helped bring the prices down.

Growth constraints reflect state, national pressures

Despite those positives, Wobbekind said Mesa County faces the same structural constraints affecting Colorado and the national economy.

“We’re forecasting relatively slow employment growth,” he said. “Not because demand isn’t there, but because labor supply is limited.”

Wobbekind said Colorado’s labor force has effectively topped out because of slower migration into the state, declining labor-force participation, and federal immigration policy. As a result, businesses may struggle to expand even in healthy sectors.

Retail sales growth is expected to remain subdued in Mesa County, consistent with statewide trends. Wobbekind said flat consumer spending is already creating tighter budget environments for many local governments across Colorado, as revenue growth has failed to keep pace with rising costs.

At the national level, Wobbekind identified rising federal debt as a significant long-term risk. While he said the United States can service its debt, the implications extend beyond repayment.

“The issue is not whether we can pay our debt,” he said. “It’s what that debt crowds out.”

Wobbekind said higher debt levels can limit future infrastructure investment, and reductions in federal interest rates may not translate into lower home mortgage rates because of the nation’s growing debt levels. He said the issue is partly tied to who is buying U.S. debt, noting some foreign governments are purchasing less U.S. debt than in the past. That shift can place upward pressure on yields, meaning cuts to the federal funds rate do not automatically lead to lower mortgage rates or reduced borrowing costs across the broader economy.

The K-shaped economy

Wobbekind said the national economy is increasingly defined by what he described as a “K-shaped economy,” where different groups of households experience very different outcomes at the same time.

“You’ve got one part of the economy doing fairly well, and another part that’s really struggling,” he said. “Higher-income households are still spending, and they’ve been able to absorb higher interest rates much better.”

Lower income households, however, face a much tighter reality.

“They’re spending a much larger share of their income on necessities,” Wobbekind said. “Housing, food, transportation, those costs don’t leave much room for discretionary spending.”

He said that pressure is beginning to show up in the data.

“We’re seeing delinquencies go up, and we’re seeing bankruptcies go up,” he said, adding those trends are concentrated among households with less financial flexibility.

Wobbekind said the same divide is visible across businesses.

“If you’re serving higher-income consumers or you’re in essential sectors like health care or professional services, you’re generally doing OK,” he said. “If you’re more dependent on discretionary spending, it’s a lot tougher.”

While overall economic indicators remain stable, Wobbekind said those headline numbers can obscure underlying strain.

“The averages look fine,” he said. “But underneath that, there’s a lot of divergence, and that’s something people really need to pay attention to.”

Long-term outlook depends on positioning, not speed

Wobbekind closed by encouraging communities to focus on long-term positioning rather than short-term fluctuations, noting economic cycles are inevitable.

“What happens in one year is not the end of the story,” he said. “The real question is where this community is positioned five or ten years from now.”