State feeling chinks in economic armor

Job growth projections for 2008 were recently cut by a third, in the state's own analysis, to 2 percent from 3 percent or more only a month ago. New housing starts are expected to fall nearly 60 percent in Utah in 2008, a worse hit than Nevada or Arizona, which have become national symbols of the housing mess, according a recent national forecast by Moody's Economy.com.

Utah does not have the same magnitude of problems that other states are facing, and if history is a measure it will weather a recession better than many other regions. Only twice since the early 1960s, even as the nation endured numerous recessions, has Utah had fewer jobs at year's end than it did the year before.

People like Dawn Updyke and Rick Draper, who helped bring Utah to its new place, are feeling the effects.

Updyke relocated from Ohio last year when her employer, the packing materials company Third Dimension, opened its first Western outpost in the southern Salt Lake City suburbs. Draper was local, with roots deep in Utah pioneer history, and took a job as Third Dimensions' plant coordinator. She adjusted to Utah life as the production control manager; he adjusted to having bosses in the Midwest.

But after 11 months, the company is still at only 30 percent capacity. Finding and keeping employees was a problem in the beginning, Draper said. Now the bigger problem is demand. The company's biggest customer, the Ohio cabinet manufacturer KraftMaid Cabinetry, which broke ground for a big factory in the Salt Lake Valley in 2005, has struggled to gear up its production and is not buying as many polyfoam and fiberboard shipping boxes as projected.

"I don't foresee any large growth as of now," Draper said.

A spokeswoman for KraftMaid, Kim Craig, declined to comment on the company's projected hiring or production. She said in an e-mail message that the Utah plant, which serves the Western states and Canada, could employ up to 1,300 people "when manufacturing reaches full capacity."

Historically, the West has always moved to a different beat. Manufacturing was never much of a factor to consider, but commodity prices for things like copper and gold were. Government spending on the military — a huge force through the Cold War as cloistered desert bases and depots expanded — was usually a better economic indicator than the Dow Jones Industrials.

But the Rocky Mountain region has evolved since the last national recession in the early 2000s. Real estate and construction has increasingly supplanted mining and military. Recreation, with foreign visitors increasingly important, dwarfs ranching.