Utah's economy may improve in 2010

Utah's economy seems poised to climb out of its doldrums, with prospects for "modest" job creation within six to nine months, says the latest issue of the Zions Bank report "Insight — Economic News of Utah and the Nation."

In the report, released Tuesday, its author and Zions economic consultant Jeff Thredgold predicts "more signs of life throughout 2010" for Utah's economy. But not everything will come around that fast, and "more vibrant" economic conditions may be 18 to 24 months away.

Utah's year-over-year unemployment numbers may even look a little worse in the next two months, he said, noting the state is already "down roughly 54,000 jobs from a year ago." But he believes Utah "is close to the bottom, and that's true for most states."

The state's economic recovery, following its worst downturn since the Great Depression, hinges on that of the U.S. economy and, to some degree, the global economy, Thredgold said. Both of those are beginning to rebound. He said that the U.S. economy was growing a little slower this quarter than last, but it was still growing.

Thredgold believes Utah will fare well in terms of bringing in new business and retaining existing companies because the price to do business here is "reasonable" and the cost of living is lower than in many parts of the country. Moody's Economy.com in August said Salt Lake City was 87 percent of the national average and Provo-Orem 81 percent in terms of the "cost of doing business."

Much of the prediction about Utah's economy is based on employment data, because that's the best local data available, he said. He noted that the states which border Utah have much higher unemployment, averaging 9 percent compared to Utah's 6 percent, although Utah employment experts have said the numbers may revise upward "with greater job losses than counted." Even so, Utah unemployment is lower than that of the nation.

Most of the lost jobs were in construction and manufacturing, but "substantial Utah employment weakness has also occurred in trade, transportation and utilities, and professional and business services." Only education, health services and government have added jobs in the past 12 months.

Thredgold said the fact the stock market rallied 50 percent to 60 percent since its lows in March is positive, since it typically "looks six to nine months ahead." And low mortgage rates, which averaged 4.87 last week for a conventional 30-year fixed loan, help the marketplace, too, making it possible for people to refinance or buy a home. Thredgold predicts "modest but continual improvement" in new home construction in coming years.

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