After 1986 and 1987 slumps in Utah's labor market, 1988 labor figures rebounded nicely, according to an annual report from Floyd Astin, Utah Department of Employment Security administrator.
Rapid employment growth in services and manufacturing provided the boost the sagging Utah economy needed this year to push some negatives to the positive side of the ledger.This activity was supported by beneficial economic conditions, such as industrial and commercial business openings and expansions, high commodity prices and a continued national business expansion, Astin said in his 1988 review and a forecast for 1989.
"On the basis of these strengths, Utah's employers created 18,900 new jobs this year, a 3 percent growth. Another factor helping the state economy was the 5.1 percent unemployment rate, which was 19 percent lower than the 1987 rate of 6.3 percent," Astin said.
For next year, Astin said Utah's nonagricultural industries likely will provide nearly 20,000 new jobs, a 3 percent increase.
Continued acceleration in job growth is not anticipated because in 1988 Utah had some one-time employment increases such as Geneva Steel's rehiring and ShopKo's opening of seven new stores and hiring 1,800 people, which boosted the annual job growth by 0.4 percent.
Astin said it is unlikely such benefits will occur in 1989, but other industries, mainly construction, should pick up the slack.
He said Utah's 1989 unemployment rate will remain at the present 5.1 percent level with the average number of people out of work remaining at 40,000. "However, economic uncertainties due to the U.S. trade and fiscal deficits, and potential defense spending cutbacks, could have a negative impact on Utah's economy in the later months of 1989," Astin's report said.
While noting that nonagricultural job growth improved in 1988, Astin said the biggest increase in job growth came in the service-producing industries such as transportation, communication, public utilities, trade, finance, insurance, real estate, services and government.
These industries combined to provide three new jobs for every one new job created in the goods-producing sector, the report said.
The report said a continuing problem facing the state is the divergence between the economic well-being of the metropolitan areas vs. the rural areas.
For example, Astin said, Utah's 1981 unemployment rate averaged 6.7 percent, with only two counties having unemployment above 10 percent. Those figures mean the unemployment was shared proportionately around the state.
But, by 1987, he said, the state's unemployment rate stood at 6.3 percent and ten counties, all considered rural areas, had double digit unemployment rates. In 1988, the figures improved dramatically: Only four rural counties had more than 10 percent unemployment rates.
"Even though many of Utah's non-metro counties experienced a dramatic drop in jobless rates during 1988, the economic vitality of some of these still is marginal. This is because their declining jobless rates are not the result of new job opportunities, but of the declining number of workers in the area," the report said.
The 6 percent job growth in Utah's manufacturing industry far overshadowed the 1987 increase of less than 1 percent.
"However, these annual averages mask important underlying trends that should be reviewed. For example, despite the impression given by the annual average job growth data, 1987 was a very good year for Utah's manufacturing industry."
Astin said the 1989 manufacturing outlook is for continued slowing of job growth, with 2,200 new jobs or a 2.2 percent increase. Manufacturers of nondurable products such as foods, chemicals and plastics will provide most of the new manufacturing jobs next year.
Astin said total nonfarm payroll wages in 1988 increased 5.8 percent in 1988 from the 3.6 percent increase in 1987 and 3.1 percent in 1986. He said this indicates Utah's economy is improving and believes the nonfarm wage increase should be 6.2 percent next year.