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After more than two years of job losses, Utah economic growth has once again turned positive—a development expected to pick up speed during 2004. Stronger Utah economic performance is, in part, tied to much stronger U.S. economic growth, as well as a strengthening of the global economy.
The most recent Utah employment data showed a rise of 2,700 net new jobs over the most recent 12-month period. While upcoming monthly economic data will be subject to fits and starts, Utah employment gains should improve throughout 2004 and strengthen considerably in coming years.
“We are projecting a rise of 15,000–18,000 net new jobs in Utah during 2004,” predicts Jeff Thredgold, president of Thredgold Economic Associates and economic consultant to Zions Bank. While the roughly 1.5% gain is not all that impressive when compared to average net annual gains of 35,300 new jobs during the 1990s, and the gain of 29,000 jobs in 2000, the projected rise would be the best in four years. Also by comparison, the Utah economy added a meager 5,900 jobs in 2001 and lost 8,700 jobs in 2002, the worst Utah job performance since 1954.
The state’s unemployment rate has also reflected an improving labor market. Utah’s unemployment rate averaged 4.8% in recent months, and 5.2% during 2003. By comparison, the state’s jobless rate averaged 6.1% in 2002, the highest level since 1987.
SECTOR PERFORMANCE
Manufacturing: Weakness has continued in manufacturing, though the pace of decline is slowing. Utah lost an estimated 1,400 manufacturing jobs over the most recent 12-month period, in line with national manufacturing weakness, which has seen the loss of about three million jobs over the last four years. There are currently about 112,000 manufacturing positions in Utah. Manufacturing employment in Utah is expected to grow by about 1.9% per year through 2010.
Construction: Utah’s construction sector lost about 500 jobs over the past year, a continuation of decline following the massive construction buildup of recent years, tied primarily to 2002 Olympic Winter Games preparation and freeway/light rail spending. The value of permit-authorized construction set an all-time record of $4.5 billion in 2003. About 65,000 people are employed in the construction sector.
Trade/Transportation/Utilities: This sector of the economy, which includes wholesale and retail trade, has maintained payrolls at roughly the same level as a year ago. Roughly 220,000 individuals work in this sector.
Information: Publishing, motion picture and sound recording, telecommunications, and Internet service providers make up the information sector. Employment levels in this sector are relatively unchanged from a year ago at about 31,000 positions.
Financial Activities: Modest job growth in financial activities returned in 2003 after flat performance in the last half of 2002. Employment in this sector, currently at about 64,000 jobs, is expected to exceed 70,000 jobs by the end of the decade.
Professional and Business Services: The professional and business services sector, which includes activities such as legal services, architecture, engineering, and employment services, saw employment rise by 1,100 jobs in the most recent 12-month period to 132,800 positions. Employment services, which includes temporary employment, saw a strong gain of 6.0% over the past year. Gains in temporary employment are usually a precursor to gains in permanent positions across all sectors.
Education and Health Services: Growth in this sector, primarily in the area of healthcare, has been strong throughout the recent downturn. Roughly 122,000 individuals work in this sector. Growth in healthcare employment in coming years should outpace job growth in other sectors.
Leisure and Hospitality: Boosted by the 2002 Olympic Winter Games and plenty of freshly-fallen Utah powder, this area of the economy has grown by around 1.0% in the latest 12-month period. About 100,000 Utah residents work to feed, entertain, and accommodate both visitors and locals alike.
Other Services: Auto repair, personal care, and non-profit organizations are some of the employment categories in this sector. Employment in other services is unchanged over the year at 32,600 positions.
Government: The three levels of government¾federal, state, and local¾account for a combined 18% of the non-farm jobs in Utah, with payrolls totaling 199,300 in the latest month. Revenue shortfalls and budget cuts have resulted in flat payrolls recently after years of job growth. Growth will return to this sector as the overall economy continues to improve.
HONOR ROLL
The Corporation for Enterprise Development conducted a recent study of all 50 states. Its 2003 Development Report Card for the States ranked Utah among the top eight states in terms of economic performance, business vitality, and development capacity. The only other Western state in the top eight was Colorado.
LABOR FORCE
Utah is one of the youngest states in the nation, with about one-third of the state's population under 18 years of age. It is also among the healthiest—with the lowest death rate for cancer and the second lowest for heart disease. This translates into an abundant, energetic workforce for many industries.
Utah’s workforce has been described as smart, productive, motivated, and multilingual. In fact, the most often-cited advantage of conducting business in Utah is the workforce. Major companies that have relocated to Utah report productivity advantages of 25 to 30 percent at their Utah facilities. And, as one of the healthiest areas in the country, employers often note the low absenteeism rate of the local workforce.
UNION
As a right-to-work state, no individual seeking or holding a job
in Utah may be forced to join or pay dues to a labor union.
Fewer than 5 percent of manufacturing employees are affiliated
with unions.
INCOME
Median household income in Utah, at $48,537 in the latest measurement, was substantially higher than the national average of $43,052. Higher median household income was the result of more wage earners per household in Utah than in the nation. The average household size in Utah is the largest in the nation.
Also, according to Census figures, 64.8% of Utah households are comprised of married-couple families (which ranks Utah first in the nation). Utah has the lowest ranking in the nation for the percentage of families with children headed by a single parent. Married-couple families, which usually have two or more incomes, also help raise median household incomes in Utah.
UTAH OUTLOOK
The state’s economic outlook is the most promising in four years. Utah has seemingly turned the corner toward positive employment growth. While projected growth this year won’t rival the boom period of the mid-1990s, we are moving in the right direction.
updated:
04-22-2004
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