The Utah economy continues to rank as the nation’s strongest as measured by the pace of net job creation and the rise in existing home prices. The state’s leadership position is likely to continue in coming months even as both sectors experience some slowing.
Job creation
The Utah economy added roughly 53,500 net jobs during the most recent 12-month period, a powerful 4.4 percent growth pace. The Utah economy continues to add jobs in each of the state’s 11 major employment sectors.
Utah’s unemployment rate averaged 2.5 percent in 2007’s first nine months, the lowest average in the state’s history, and easily one of the lowest average rates in the nation. By comparison, Utah’s jobless rate averaged 2.9 percent in 2006, 4.1 percent in 2005, and 5.5 percent from 2002 to 2004. High levels of net in-migration have been instrumental in keeping job creation strong. Utah’s construction sector is evolving into one that is less dependent upon single-family home construction and one more balanced with new and existing commercial real estate projects. Such a development is timely as U.S. and global credit tensions related to nontraditional home finance programs remain high.
Rising Home Values
The state’s new single-family home construction market has slowed in line with weaker performance across the nation. Such slowing has occurred even as the latest national data continues to show Utah recording the nation’s strongest pace of home price appreciation.
Home price data from the National Association of Realtors measuring second quarter 2007 performance versus 12 months earlier ranked Salt Lake City as having the largest median (half cost less, half cost) price increase in the nation, with a rise of 21.9 percent to $233,100.
The Office of Federal Housing Enterprise Oversight (OFHEO) ranked the average Utah existing home first in the nation in the 12-month period ending June 30, 2007, with a 15.28 percent price increase. Provo-Orem, Salt Lake City, and Ogden-Clearfield each ranked among the nation’s top four markets for average-home price appreciation.
Cost of…
The August 2007 Utah “cost of doing business” estimate by Economy.com was 91 percent of the U.S. average. Similar costs for Salt Lake City and Provo-Orem were 97 percent and 93 percent, respectively.
Utah Outlook…
The nation’s strongest state economy is likely to slow somewhat during the next six to 12 months tied to more sluggish U.S. economic growth, and extremely limited labor availability.
Finding a job in Utah…
With historically low unemployment hovering around 2.5 percent and a job creation rate that tops the nation, finding a job in Utah has arguably never been easier. Opportunities for finding employment increase even more for job seekers with in-demand skills, such as those in health care, construction, and engineering occupations.
Specific categories of workers that remain especially in demand in Utah include software engineers, truck drivers, retail sales workers, and registered nurses. The fastest growing Utah occupations include home health aides, network systems and data communications analysts, medical assistants, and compensation/benefits specialists.
Employment by sector…
· Manufacturing – Utah gained an estimated 4,800 manufacturing jobs over the most recent 12-month period, a growth rate of 3.9 percent. There are currently about 129,000 manufacturing positions in Utah.
Construction – Utah’s construction sector has been a key contributor to employment growth in recent years and will likely continue to be strong, especially in non-residential construction
· Construction – Utah’s construction sector has been a key contributor to employment growth in recent years and will likely continue to be strong, especially in non-residential construction. Roughly 11,800 jobs were added in this sector over the past year. This translates into an impressive growth rate of 11.7 percent. About 113,000 people are employed in the construction sector.
· Natural Resources and Mining – Oil, natural gas, coal, and copper are some of the natural resources extracted by this sector of the Utah economy. Nearly 12,000 people work in natural resources and mining, an increase of 10.8 percent from a year ago.
· Trade/Transportation/Utilities – This largest sector of the Utah economy, which includes wholesale and retail trade, saw an increase of 11,000 jobs over the past year, a growth rate of 4.6 percent. Roughly, 248,000 individuals work in this sector.
· Information – Publishing, motion picture and sound recording, telecommunications, and Internet service providers make up the information sector. Current employment in this sector has hit about 32,800 positions, an increase of 100 jobs from a year ago.
· Financial Activities – Growth in financial activities was quite strong in the past year, which 4,100 new positions added. Nearly 76,000 Utahns are employed in financial activities, an increase of 5.7 percent over the year.
· 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 7,000 jobs in the most recent 12-month period to 164,800 positions. This represents a growth rate of 4.4 percent.
· Education and Health Services – Growth in this sector has been strong over the last 12 months, with an increase of 5,600 positions. Roughly 142,000 individuals work in this sector. Growth is split fairly evenly between educational services and health services.
· Leisure and Hospitality – Boosted by the 2002 Olympic Winter Games and plenty of world-famous Utah powder, this are of the economy has grown by around 4.3 percent in the latest 12-month period. Roughly 114,000 Utah residents work to feed, entertain, and accommodate visitors and locals alike.
· Government – The three levels of government – federal, state, and local – account for a combined 17 percent of the non-farm jobs in Utah, with payrolls totaling 208,000 in the latest month. This represented a modest 1.0 percent growth rate from one year ago.
· Other Services – Auto repair, personal care, and non-profit organizations are some of the employment categories in this sector. Employment in other services is up 4.3 percent over the year at 36,500 positions.
Implementing quality growth strategies makes business sense
Business owners seek to recruit the best employees, maximize their productivity, keep business costs low, and ensure the business climate is favorable for the long term. Envision Utah’s Quality Growth Strategy – developed with the participation of thousands of Utahns in an innovative process – helps accomplish each of these goals.
Utah’s vibrant communities are a key advantage in the fierce competition to recruit and retain jobs and highly skilled workers. The goal is to help our communities sustain this critical advantage.
Employees who arrive at work stressed from a long, slow commute are distracted and less focused. Heavy traffic also stifles movement of goods and services, a direct hit to the bottom line. Therefore, efforts to reduce congestion and give workers more transportation choices translate into increased productivity.
Envision Utah has been instrumental in increasing the options available to commuters. In addition, Envision Utah facilitated Wasatch Choices 2040, an extensive public process that examined land-use and transportation choices in Weber, Davis, Salt Lake, and Utah counties. The resulting vision emphasizes the need to coordinate land use and transportation more effectively, and formed the basis for our region’s new long-range transportation plan.
Implementing the Wasatch Choices 2040 recommendations will reduce traffic congestion 18 percent and increase transit use 12 percent relative to existing plans – all at no additional cost!
According to the Governor’s Office of Planning and Budget, Envision Utah’s Quality Growth Strategy will save $4.5 billion in infrastructure costs over 20 years. That allows business owners to invest in their enterprises, rather than in unnecessary tax coffers. In addition, by improving air quality, the Quality Growth Strategy reduces the likelihood of Clear Air Act sanctions that primarily target businesses.
The Quality Growth Strategy is well known outside of Utah and gives our region a concrete competitive advantage in recruiting and retaining businesses.
Recognizing that how we grow matters, many of Utah’s public and private sector leaders are active partners with Envision Utah. Together, we are building a future based on our shared hopes and values. www.envisionutah.org
Utah’s population is continually growing and in 2007 it reached a record 2.7 million residents, including births, mortality, and those moving in and out of the state. Ask a newcomer to describe Utah residents and you'll hear words like friendly, industrious, and young. Ask Utah economists to describe Utah's population and they'll say healthy.
Utah placed third amongst the nation’s fastest growing population with a rate of 2.6%, from 2006 – 2007. The state's rapid growth is attributed to both the area's high birth rate and to in-migration. Another attribute is Utah’s low unemployment rate, which is 2.7%. Though 2008’s economy is expected to be slightly lower than the previous year, the outlook is still very optimistic.
Economy
