Utah economy recovering faster than nation, new report says

SALT LAKE CITY — The Utah economy is poised to continue its upward growth trend for the next year, particularly in jobs and housing.

Utah is coming out of the recession more rapidly than the rest of the nation, as has been the case with every downturn since World War II, according to a report released by the Governor’s Office of Planning and Budget titled Economic Outlook 2013.

Job growth in the Beehive State should rise at twice the national rate, but is expected to stabilize just above the long-term average of 3.1 percent. Housing and construction will play a leading role in the strengthening recovery, the report states.

The annual report was presented to Gov. Gary Herbert and an audience of business and civic leaders Thursday during a forum organized by the Salt Lake Chamber.

Utah grows more rapidly than the nation at large, with the broader national business cycle governing local recessions and expansions, according to the report. Both Utah and the U.S. began growing during the summer of 2009, but unemployment has remained well above pre-recession levels.

Over the past two years as the recovery has progressed, both employment and income in Utah have grown faster than the national average, the report said. The state has especially benefited from its position as a logistical hub for production and distribution to the West Coast and nationwide.

“Utah is at the forefront of states that are continuing the path of growth out of the recession,” said Jacob Belk, research analyst in the Office of Planning and Budget.

The state’s economic growth has accelerated during each of the years since the recession ended, but is expected to plateau near the long-term average during 2013, according to the report.

On the employment front, Utah is expected to grow at 3.5 percent, while the rest of the nation grows at 1.4 percent. With job growth near the long-term average, the Utah jobless rate is expected to hover around 5.4 percent.

Meanwhile, in contrast to the early stages of the recovery, housing should provide significant support for the state’s economic expansion with construction employment forecast to grow 9.4 percent this year, according to the report. The continuing housing recovery should account for most of the strong showing in the construction sector.

At 5.4 percent, professional and business services is predicted to be the second fastest growing sector, adding nearly 9,000 jobs in 2013. Additionally, the trade, transportation and utilities sectors are expected to create 8,200 new jobs this year.

Retail expansion is expected to be driven by intensified consumer spending, the report states, while increasing business will bolster the need for administrative support.

Employment in the education and health services sectors is predicted to jump 3.2 percent for the year, meaning 5,200 new jobs statewide. The hike is reflective of the rising demand for health care in Utah and the rest of the country, the report said.

Belk said increasing the rate of economic recovery is something the state could work to improve during the coming year. However, barring some unforeseen circumstance, Utah seems to be on the right track economically speaking.

“Looking at the economy as a whole, it looks very healthy,” Belk said. “There are not many scenarios where you can imagine that we wouldn’t see strong growth in large portions of the Utah economy.”

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