SALT LAKE CITY — The stability that characterized Utah’s economy throughout 2015 is expected to continue this year, a new report states.
The Economic Report to the Governor, prepared by the Utah Economic Council, said the Beehive State should continue to have robust economic growth, positive labor market performance and an increasing number of people moving to Utah in 2016.
The report was released Wednesday and presented to Gov. Gary Herbert and an audience of business and civic leaders at the Salt Lake Chamber’s annual Utah Economic Review breakfast at the Hilton Salt Lake City Center.
Analysts said Utah’s stellar economic performance in 2015 portends a strong likelihood of another favorable year for the state economy.
“Utah led the nation in job growth in 2015, a signal that economic opportunity may be better in Utah than in any state,” said Juliette Tennert, co-chairwoman of the Utah Economic Council and director of economic and public policy research at the Kem C. Gardner Policy Institute. “Much of this growth was fueled by significant growth in Utah’s technology, construction, and leisure and hospitality sectors.”
Tennert said employment expansion should last throughout 2016 and that unemployment could fall even further from its already near-record low rate as discouraged workers who have been “on the sidelines” out of the active job market make the decision to return to work this year.
“Those workers are going to continue to come into the labor force as the opportunities get better and better,” Tennert said. “So we’ll see (the jobless rate) come down just a bit (more).”
Utah led the nation in job growth for seven months and ranked second the remaining five months, said Carrie Mayne, chief economist for the Utah Department of Workforce Services.
Circuit board production at weBoost, formerly Wilson Electronics, in St. George, Utah. (Photo: weBoost)
Technology jobs grew 7.7 percent in the information sector, Mayne said, while construction reached its highest level in eight years with major projects downtown and at the nexus of Utah’s two largest counties.
Utah’s leisure and hospitality industry added 7,900 new jobs as Park City saw the creation of the largest ski resort in the country. Foreign trade continued its diversification trend with 4 percent year-over growth in nongold exports, while major employers such as Goldman Sachs brought on 2,600 new workers in the financial activities sector, helping Utah earn a reputation as the “Wall Street of the West,” the report stated.
Meanwhile, the median household income statewide grew at 2.6 percent compared with 1 percent nationally.
In the commercial real estate market, development in downtown and across the Salt Lake Valley has been fueled by sustained growth in the technology sector, explained Darin Mellott, Utah Economic Council member and senior research analyst for commercial real estate firm CBRE.
“We are still looking at a significant portion of office leasing associated with tech,” Mellott said.
Additionally, tech jobs are projected to expand total employment due to the “multiplier effect” in which up to five jobs are produced in other sectors as a result of tech expansion, he said.
But Mellott advised Utah leaders to avoid becoming “too comfortable” with the economic achievements the state has made in recent years. He said lawmakers should continue to adequately fund education to ensure long-term viability of the local workforce in the years ahead.
Choosing complacency could prove harmful in the long run if the state is unable to continually produce a strong pool of candidates across multiple employment sectors, he said.
Mellott also noted that the state economy would not be without some challenges in 2016, including geopolitical instability, the global slowdown, normalization of monetary policy and supply of workers. In addition, education warning signs and persistent air quality challenges continue to cause concerns, he said.
Despite the potential concerns, the state’s economic fundamentals are solid and should be enough to continue moving Utah forward in the coming year, Mellott said.
“All the ingredients are there for continued success in 2016,” he said.