The global economic meltdown is hitting Utah, whose strong economy has for a time somewhat sheltered residents and workers here from larger storms.
Utah's economic activity, at the top of the nation in 2006 and 2007 in terms of job growth, is at its weakest pace in five years. The state's economy is expected to continue along that path well into 2009, Jeff Thredgold, economic consultant to Zions Bank, said in the bank's Autumn 2008 "Insight" publication, released Wednesday.
While Utah is not yet in recession, "that's not to say we couldn't slide into a mild one," as Arizona, Idaho, Nevada and California have, he said.
From 2004 to 2007, Utah posted 44,300 new jobs each year, for a 3.9 percent annual job growth. But this year, 15,000 construction workers lost their jobs, and unemployment rose to 3.7 percent in August up from 2.8 percent the year prior.
New house construction remains slow, Thredgold writes. New starts are at their lowest level since the early 1990s, reflecting national trends. The global credit crisis is tightening home-loan availability here.1 comment on this story
"Utah's economy has gone from about a 60 mile-per-hour pace a year ago ... to about a 5 mile-per-hour pace now," Thredgold said. "We could, by the end of the year ... be talking about a Utah recession" in terms of job growth, if nothing else.
On the brighter side locally, some construction is forging ahead, such as the downtown City Creek project, Thredgold writes. The federal $700 billion financial rescue also should help housing markets to turn around in mid- to late 2009. And continued falling oil and other commodity prices could help reverse inflation, which hit a 17-year high in recent months.
Still, the U.S. economy likely will remain bogged down in budget deficits, for some time, Thredgold said."The U.S. economy is in recession; it's going to stay in recession for awhile. But we'll see more and more signs of coming out of it in 2009," he said. "We will get through this ... (but) we'll probably have more pain."