Mountain West output, jobs trail nation in economic recovery

Mountain West output, jobs trail nation in economic recovery
Recession» Study says Ogden-Clearfield a beacon of strength thanks to exports.

By Brandon Loomis
The Salt Lake Tribune
Updated: 03/16/2010 06:46:22 PM MDT

The Intermountain West is heading into new and unwelcome economic territory, according to a quarterly report by the Brookings Institution's regional study program at the University of Nevada Las Vegas.

For the first time in 35 years, the region is lagging behind the rest of the nation's recovery from a recession and may need some "soul searching," according to Brookings Mountain West co-director Mark Muro. Heavily invested in real estate and construction in such previous growth areas as Las Vegas, Boise, Idaho, and St. George, he said, the region as a whole crashed hard and needs diversification.

It particularly needs export businesses, he said. One exception is the Ogden-Clearfield metropolitan area, whose high export levels have put it in relatively strong position heading out of the downturn. The report singles out Electronic Arts, a video game maker that's technically in the Ogden-Clearfield zone because of its location in south Davis County, as performing exceptionally well through export royalties.

EA has announced it will soon move its 100 employees south to downtown Salt Lake City.

"Places that are exporting have been relatively fortunate and had something else to draw on," Muro said. That's why Ogden-Clearfield and Albuquerque, N.M., are the only two major metros in the region to have returned to their pre-recession economic output in the fourth quarter 2009, according to the Brookings report. They're also the only two to add
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jobs in the fourth quarter, though they're not anywhere close back to pre-recession employment levels.

"It's quite an accomplishment to be simply not losing jobs right now," Muro said.

Exports account for about 16 percent of Ogden-Clearfield's economic output, compared with 10.8 percent in the Salt Lake metro area.

Utah as a whole is faring better than much of the region. Salt Lake's employment is off 4.9 percent from pre-recession peaks, compared with losses of 10.7 percent in Boise, 10.6 percent in Phoenix and 9.8 percent in Las Vegas, according to the quarterly report. That's no surprise to University of Utah economist Pam Perlich, who said Utah consistently ranks among the nation's most diverse economies.

Since shedding its 1970s image as having little but energy production and federal jobs, she said, the state has developed substantial manufacturing, military, biomedical and technology sectors. The state's universities help drive the economy, she said, and people have continued moving here even as jobs were lost over the past three or four years -- an indicator that they're betting on Utah's recovery.

What saved the Wasatch Front from bottoming out the way Phoenix has?

"Salt Lake's not known for second homes," Perlich said. Though St. George's retirement-based construction sector took a hard hit, she said, Utah as a whole didn't ride as high on the real estate bubble as much of the West did.

The Ogden region also benefits from relatively high levels of high school graduation, Brookings finds. Education levels -- especially in college towns with many bachelor's degrees -- appear to buffer the recession, Muro said.

"It's good to be educated when the bottom falls out," he said.

Ogden-Clearfield -- including all of Weber, Davis and Morgan counties -- has increased its "Gross Metropolitan Product" 1.8 percent from its pre-recession high, Brookings finds. That's good for a No. 8 ranking nationally.

Salt Lake's output remains down 1.9 percent from before the 2007 start of the crash, and Provo-Orem is down 1.5 percent.

Construction-heavy economies continue to suffer more. Boise's output remains down 4.1 percent. Las Vegas is off 4.4 percent.

In previous recessions the Intermountain West carried the promise of many jobs, even if they weren't always the best jobs, Muro said. This time, employment in the region's metro areas remains 7.4 percent below pre-recession figures, while the nation's top 100 metros are down 4.6 percent and the nation as a whole is down 4.9 percent.

"It's a time of maybe needed deep reflection about the sources of future growth in a region that has always promised rapid snap-back [before]," Muro said.

A good place to start would be in producing more, he said, instead of relying on consumption, including real estate.

bloomis@sltrib.com