While tied to outside influences more than ever and facing slipping economic statistics, Utah nonetheless will fare better than many states when emerging from the economic downturn, the chief economist in the Governor's Office said Tuesday.

Speaking Wednesday at the Utah Foundation's annual meeting, Juliette Tennert said Utah's economy is "more broadly integrated" with the national and global economy than ever before and thus Utah's performance will depend on what happens at those levels. But several factors — unique demographics and industry diversity among them — work in Utah's favor for recovery, she said.

"We have one of the most diverse economies in the nation," Tennert said. "That means that while we're certainly impacted by the national contraction, we'll recover quicker than many other states."

Tennert is predicting Utah's unemployment rate to pass 6.5 percent in 2010 although still be relatively low when compared to most other states and the national prediction of above 9 percent. Utah employment will move from slight growth to a 2.5 percent decline in 2009 and flatten in 2010. "This will be the worst decline since the 1950s; however, it will not be as bad as the 3-plus decline that's expected at the national level," Tennert said.

Other predictions call for Utah home prices to fall 8 percent this year and 5 percent in 2010; average Utah pay growing 1.9 percent this year and 1.6 percent in 2010; and residential construction activity falling in 2009 but returning to "some level of stability" the next year.

"If not for the infusion of cash (from the federal economic stimulus package), I expect that this picture would be even grimmer," Tennert said. "While the outlook over the next year is certainly weak, we should not forget about the inherent strength and durability of Utah's economy. We are well-positioned to manage the downturn, and we really should be grateful for those dynamics that I mentioned that will help keep Utah's downturn less severe and help us to recover quicker than in many other states."

Economic woes led the Legislature to budget cuts of $250 million and later $350 million. Senate Majority Assistant Whip Greg Bell, R-Fruit Heights, described those cuts as "truly Draconian" but also "done with as much precision as possible."

Federal stimulus funds "effectively hide" effects of budget cuts in 2010, but the full effects will be seen in 2011, he said.

"We don't live in a vacuum, and I think that's going to be the message today, that Utah is doing extraordinarily well in so many regards and though our ship seems to sail fairly well, we are getting a lot of backwash from national and international conditions over which we have no control," Bell said. "So for a while it seemed some were immune and now it seems no one is, and we're all going to have to live with the difficult circumstances and conditions imposed upon us by these challenging times."

Natalie Gochnour, chief operating officer at the Salt Lake Chamber, said long-term economic success for Utah can be tied to globalization efforts, including continued funding and a building to house the World Trade Center Utah and becoming a "more welcoming" state. "We live in a post-American world, period," she said. Improving education and air quality and developing energy security were among her other suggestions.

E-MAIL: bwallace@desnews.com