Utah’s Economic Weakness Expected to Continue into 2010

Utah’s Economic Weakness Expected to Continue into

by Zions Business Resource Center

The Utah economy is suffering the same recession disease experienced by the vast majority of states and is likely to continue so into 2010, according to the Spring 2009 issue of Zions Bank's "Insight - Economic News of Utah and the Nation," released today.

"The weakest economic performance in the Beehive State in nearly 50 years is somewhat surprising since the state led the nation in the percentage growth in employment two to three years ago," says Jeff Thredgold, economic consultant to Zions Bank and author of "Insight". "Those who believe Utah is largely insulated from developments across the nation and around the globe merely need look at events of the past 12 months for a different conclusion."

The Utah economy suffered a net loss of 26,000 jobs over the most recent 12-month period, a decline of 2.1 percent. Even more painful employment contraction is found among most of Utah's neighbors, with the exception of energy-rich Wyoming. Nonetheless, job losses across the Utah economy have left few sectors untarnished.

The quarterly "Insight" publication features updates on current and projected economic and financial developments for the state of Utah, the nation, and the global economy. The Spring 2009 issue also examines the Federal Reserve's efforts to stabilize the economy. Following are a few highlights from the Spring 2009 issue of Insight:

* The state's goods production sector has seen 22,000 jobs disappear, while the state's larger service-providing sector has fared better. Service sector losses have totaled 4,000 during the most recent 12-month period. A majority of service-providing sectors experienced job losses, largely offset by significant job gains in education & health services and government.

* Utah's home building market has suffered the same indignities of overbuilding as found in many markets across the nation. Utah housing starts are not likely to grow by any real measure until excess inventories of unsold homes are cleared from the market. Still, prior excessive overbuilding and home price appreciation in Arizona, California, and Nevada have led to much greater pain and downward price adjustments in those states than found across Utah. A key factor boosting the demand for Utah housing in coming years will be the nation's fastest rate of population growth. The nation's highest fertility rate, combined with expected solid levels of net in-migration, should lead to rising demand for new homes and multi-family properties.