February 11, 2004 — At last, Utah’s economic recovery appears to be underway. The persistent weakness of the job market-21 consecutive months of job losses-has finally given way to year-over-year job gains. That’s the conclusion of a new study by the University of Utah’s Bureau of Economic and Business Research (BEBR).
Forecast groups are unanimous that the number of jobs in Utah will increase in 2004. The Bureau of Economic and Business Research forecasts a 1.1% rise in nonagricultural employment for Utah in 2004, an increase of 12,000 new jobs. Other forecast groups all predict various rates of job growth. Economy.com is least optimistic at 11,000 new jobs while Blue Chip, a consensus forecast group, is most optimistic at 19,300 jobs.
Utah is part of an economic region comprised of five surrounding states with somewhat similar economies: Arizona, Colorado, Idaho, Nevada and New Mexico. The economies of these Mountain States contain many common economic characteristics consequently the economic performance of the region and states move in tandem.
While predicting future economic numbers is always a bit tricky, BEBR Director James Wood says there is at least good reason to believe the economy is headed in the right direction. “A recent stretch of positive employment growth puts this year’s forecast on much firmer ground than in 2003. The Utah economy begins 2004 with a string of six consecutive months of year-over-year employment growth, which makes the current set of employment forecasts much more credible”, said Wood.
The national recession began in March 2001. By then, Utah’s employment growth had begun a rapid deceleration that would turn negative by October with a loss of 4,200 jobs. It would take until July of 2003 before job gains were again posted by the Utah economy.
Over the past two years the jobs lost have been disproportionately higher wage jobs, i.e., those jobs at income levels above the statewide average wage rate of $30,120. Of the nine major employment sectors that have suffered significant job losses eight have an average wage rate above $30,120. The reverse is true for the sectors that recorded job growth-four of the seven growth sectors have average wage rates below $30,120.
In addition to the positive employment numbers there are several other reasons to be mildly optimistic about 2004: the Mountain States region is growing, manufacturing employment has stabilized, the threat of an overbuilt housing market appears minimal, school and road construction will continue at high levels of activity and state revenues are growing faster than anticipated.
For tables and a look at the complete study visit http://www.business.utah.edu/bebr/.