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FEATURE

Utah Economy Benefits from Strong  Demographics

Low unemployment and historically high job growth in Utah has landed the state as an economic leader in the nation, and local economists say this could be just the beginning.

A surging young labor force and shifting commerce patterns have combined to push Utah?s job growth rate to 4.3 percent compared to only 1.2 percent nationally. At the same time, the state?s unemployment rate has dropped to 2.8 percent versus 4.7 percent nationally.

?We?re first in employment growth ? heads and tails above everybody else,? says Mark Knold, chief economist for Utah?s Department of Workforce Services. ?For unemployment, it?s big time low. For us, it?s in the historical low range.?

Utah?s unique demographics are at play behind the historic numbers, Knold says, with a large pool of 20-to-30-year-olds entering the Utah job market. Nationally, that age group is much smaller and pales in comparison to the aging baby boomer sector of the workforce. Nationally, the median age of the labor force is 35 years old, while Utah?s is only 28. The next youngest median age is in Texas at 33 years old.

Young Labor Force

Knold says the local culture, which encourages large families, has contributed to the phenomenon, producing a young labor force that is fueling the economy and bringing businesses to the state. ?The social concept of marrying young and having a lot of kids, that?s the whole gist of it all,? says Knold, who adds that the spike in 20-to-30-year-olds in Utah is producing its own baby boom right now.

Utah?s wave of young workers tried to enter the workforce in 2000, according to Knold, but a lack of job openings forced many employment hopefuls back to college or out of state. But when the economy picked up again in 2003, those young workers finally came forward to ?kick the economic door down.?

Although Knold estimates this 20-to-30-year-old labor force reached its crescendo in 2007, its economic impact will still be felt in Utah for some time. The state is also benefiting from a shift in commerce patterns that is opening up the Western United States to trade and business growth. Previously hindered by mountain ranges, improved highway trafficking, expanding air transportation and the evolution of Internet commerce have unlocked the Western region to trade. Utah is in the center of that burgeoning business region both geographically and socially, and will likely see the long-term impact of that commerce shift for decades to come, Knold adds.

Infusion of International Workers

?We?re right there; we?ve got our share of it all,? he says. Simultaneously, Utah?s economy is also receiving an infusion of international workers, many from south of the border. Even with an out-migration of domestic workers between 2000 and 2005, Utah posted a net in-migration of more than 16,000 due to international workers calling Utah home.

Those immigration figures also help fuel the Beehive State?s economy, with increased retail sales, health care services and construction. For the last three years, construction has topped the growth list, an unusual position, according to Knold, for a sector that usually responds to economic growth rather than leading it.

?It?s very natural that with all the houses we?ve built, with the increase in the labor force, and with these 20-to-30-year-olds with money in their pockets, that industry would grow also because there are people making more money,? Knold says. Nonetheless, the natural position for the construction sector is to not be the engine of the economy. ?The fact that it has been the economic engine means that there is so much interest and demand and activity in all other sectors that it is driving construction,? he adds.

Shifting Gears

Still, Knold says the economy is shifting gears. In just the last two months, construction was toppled from its No. 1 spot by the trade, transportation and utilities sector. Almost all of Utah?s industries have fared well in the economic growth of recent years, particularly professional-level businesses such as lawyers, engineers and consultants.

As for the future of Utah?s economy, Knold predicts the state is on the ?cusp of slowing down,? but will likely continue to lead the nation in job growth. A recent slight dip in the employment growth rate, for example, doesn?t set off alarm bells for Knold, but rather signals a natural ebb in the market. Utah likely hit its peak in the summer of 2006 for the current growth wave, Knold adds, and already ?some steam has come out of construction.? But Knold also says he doesn?t buy into any ?doomsday? economic predictions that the U.S. market is set for collapse and will take Utah with it.

?There?s inherent strength in this economy that I don?t think people have respect for,? Knold says. ?The economy grows and attracts new people, and by attracting new people your economy grows. It?s a self-perpetuating growth cycle and it would take a big shock to stop it. When you have this kind of momentum, it?s hard to turn it off over night.?
 

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CALENDAR

Dec. 19:  EDCUtah Holiday Open House

Jan. 9:  "What's Up Down South?" Economic Summit at the Dixie Center in St. George. Contact Information:
Contact: Scott Hirschi, c/o Dixie College, 225 South 700 East
St. George, UT 84770  (435) 652-7750
www.whatsupdownsouth.com

 

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The EDCUTAH Economic Review is a weekly publication of the Economic Development Corporation of Utah. It is distributed to EDCUTAH partners and selected other government and civic organizations interested in Utah's economic development. If you prefer not to receive this newsletter, please use the link below. Subscribe or Unsubscribe Your comments and suggestions regarding this newsletter are always welcome. Click here: Comments

"What's Up Down South?"

Washington County Economic Summit 2008 Will Be Held Jan. 9

Plan now to attend the 11th Annual Washington County Economic Summit at the Dixie Convention Center in St. George!

If you have attended this event in the past, you know that the Summit will give you an insider's edge about projects and growth in southern Utah for the next 18 months. You won't want to miss the ever popular "What's Up Down South" rapid-fire multimedia presentation by local businesses and organizations on the verge of major expansions. Keynote presenters at breakfast and lunch, as well as two sessions of breakout presentations will round out the day's events.

New this year will be the afternoon bonus sessions - ?Vision Dixie Report? and ?SEED Dixie Igniter? - that extend learning and networking opportunities after lunch. These bonus sessions will be open to the general public at no charge. Breakout sessions this year include:

• Commercial Real Estate
• Residential Real Estate
• Washington County Demographic and Economic Report
• USTAR's Resources Working for Your Business
• Illegal Immigration: Legal Advice to Responsible Employers
• Five Ways to Create Explosive Growth in Any Business in Any Economy
• 20 Year Workforce Needs of the Future
• Coaching - A Manager's Handbook
• Forces for a Perfect Economic Storm
• Success Secrets of Top Tier Startups

In addition, Summit 2008 features two very special keynote speakers:

Lunch Keynote Speaker: President Michael K. Young, University of Utah. President Young will address participants about how the proposed University of Utah-Dixie State College liaison will result in expanded opportunities for southern Utah's health care, biotechnical, technological and engineering industries.

Breakfast Keynote Speaker: Walt Pavlo, Jr. Walt is a nationally recognized speaker on white-collar crime. A former mid-level MCI Communications executive, Walt pleaded guilty to embezzling $6 million from his employer and served two years in federal prison. His cautionary tale about his slide from respected manager to convicted felon has been featured in Forbes, the Wall Street Journal, the New York Times, USA Today, on National Public Radio and ABC's Nightline.

Register Now. This event always sells out early (usually within two weeks). It's still a bargain for the Early Registration rate of $65 (Dec 3 ? 9) which includes a full breakfast and lunch, as well as all of the workshops. The price increases to $80 for General Registration (Dec 10-16). If tickets are still available after Dec 16, the Late Registration price will be $100 until the event sells out. No tickets will be available at the door. Tickets are non-refundable. If you sell your spot to someone, or the attendees from your organization change, you must notify registration for that sale or change to be honored.

For the full Summit 2008 schedule and online registration, go to www.whatsupdownsouth.com or call the 24/7 Summit Info Line at (435) 652-7724. For live help, contact Registration at summit@dixie.edu or (435) 652-7754 during normal business hours.

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IN THE NEWS

Economic Development Headlines from the Past Week

Utah economy slowing down

- Business conditions index shows Utah?s economic growth may slow, but Utah and the Mountain West will continue to expand even as national economy worsens. (Deseret Morning News).

Park City hotel to be home to second Ruth's Chris Steak House in Utah

- A second Ruth's Chris Steak House is slated to open mid-month at Hotel Park City. (SL Enterprise)

Canadian health care services firm to establish U.S. headquarters in Murray

- Procura, a Victoria, B.C.-based firm that earlier this year purchased the Home Health System business unit of 3M Health Information Systems Inc., Murray, is in the process of establishing its U.S. headquarters in Murray.  (SL Enterprise)

UTA pays $10 million for second TRAX maintenance facility

- The Utah Transit Authority is moving forward with its plans for a West Valley City spur of its TRAX light rail line by acquiring the former ZCMI headquarters building. (SL Enterprise)

Eaglewood Village to break ground

- After years of planning and behind-the-scenes work, North Salt Lake?s old gravel pit is about to take its first concrete step toward becoming Eaglewood Village. (Clipper Today)

City Creek Center won't have Dillard's

- City Creek Reserve Inc., a development arm of The Church of Jesus Christ of Latter-day Saints, unveiled modified plans for the 20-acre downtown project during an open house Thursday night at the City-County Building. The new plans, which will be presented to the Salt Lake City Planning Commission Dec. 12, call for additional residential units and more space for restaurants and retailers but leave no room for Dillard's. (Morning News) (SL Tribune)

Cottonwood Mall's future hangs on vote

- The fate of Cottonwood Mall's makeover lies, in essence, in the hands of the Granite School Board. And some district representatives want assurance that if the massive redevelopment proceeds - funded in part by future tax dollars - this east-side city won't bail on Granite in the next few years. (SL Tribune) 

Renewable Sources of Energy a Potential Money-Maker for Utah

- Embracing renewable energy policies isn't just eco-friendly politics, it's also a money-maker. Sarah Wright, executive director of Utah Clean Energy, says it's a point she'll drive home Friday at the Utah Energy Forum, which is co-sponsored by her group and the Governor's Office. (KCPW)

CEBA idea gets blessing from Big Water council

- Kane County representatives normally do not visit this sleepy town, but county commissioner Dan Hulet, Dixie State College institutional advancement vice president Christina Schultz and Karen Alvey of the Center of Education, Business and Arts executive steering committee came to town to get an approval of something that could mean big things for Big Water and the county.
(Lake Powell Chronicle)

Video-game industry a big winner in Utah

- Utah's video-game industry grew by more than 32 percent from 2005 to 2006, according to a study released Tuesday by the Entertainment Software Association. The industry added approximately $77 million to the economy in 2006, compared to $58 million in 2005. (Morning News)

A new direction for northern Murray location

- Forget the soccer stadium. It's not coming. But more than 300 urban-style residential units are - and by next summer. (SL Tribune)

Plans for Aspen are still under way

- Despite a petition in the works that could stop Aspen, Utah, in its ski tracks, developer Dean Sellers and his planners continued the sales pitch Monday to a group of local government and business leaders. (Morning News)

Developer Unveils Contemporary Vision for a Mountain Retreat

- The developer of SUMMIT at Brian Head unveiled his vision of a contemporary mountain retreat, including real Utah powder delivered direct from the mountains of Brian Head Resort, which opened for the season Saturday. (Utah Business Magazine) 

Transit Comes Close to Home

- With TRAX rumbling in the background, city, company and Utah Transportation Authority (UTA) officials broke ground Tuesday on Hamlet Homes? new transit-oriented redevelopment project, Birkhill at Fireclay in Murray. (Utah Business Magazine)