A local economist advises Utah businesses to take advantage of the recent influx of Japanese tourists, who are "willing to spend their funds freely."
"Hotels, restaurants, stores and shops will benefit if they capitalize on the business opportunities represented by the Japanese visitors," said Jeff Thredgold, vice president and staff economist for Key Bank of Utah.Writing the bank's "Key Indicator" newsletter evaluating Utah's economy, Thredgold said the state's tourism industry registered a record number of visitors during 1988. He said Utah has benefited from a sharp increase in Japanese tourists, resulting from All Nippon Airways promoting the Beehive state as a winter and summer vacation destination.
"The value of these visitors to Utah should not be underestimated," Thredgold said. "The Japanese visitors, in particular, are willing to spend their funds freely. They will patronize the nicer Utah hotels, restaurants, stores and golf courses, generating a substantial amount in state and local tax (revenue) in the process."
Thredgold said Utah's economy has "staged a solid rebound" from the sluggish growth of 1986 and 1987, and the progress of the past 18 months makes the long term outlook promising as the national economy slows.
He said that growth in Utah's economy has been in several sectors, suggesting greater diversification and stability than in the past.
"An expected slowing of the national economy may lead to slightly less impressive job creation as we approach the later part of the year. However, the progress made in the past 18 months to get the Utah economy moving again has been impressive."
He said evidence of growth can be seen in a sharp increase in new jobs, a drop in unemployment and increased local business activity associated with an increase state and local tax revenues.
The Utah economy has created nearly 26,000 net new jobs over the past 12 months, compared to 13,800 jobs created during the previous 12-month period. The job growth rate of 4 percent has led to a drop in the state's unemployment level from 5.3 percent a year ago to 4.1 percent now.
Thredgold noted that this rate is one of the lowest in the country. He said Utah's growing labor force should stem out-migration, which has influenced the unemployment rate, by the state's labor force during 1989.
The service sector continues to be the largest source of local jobs, while trade and manufacturing also has experienced strong growth. Mining continues to show weak growth, despite record levels of mineral output by Utah mining operations.
"Utah's construction industry has also suffered, to put it mildly," Thredgold said. "Overall construction activity during 1988 was the worst in 20 years" with authorized dwelling units down to 5,715 from 13,000 in 1986 and the value of nonresidential construction off more than 30 percent to $272 million.
Prospects for 1989 are more upbeat, according to Thredgold, with non-residential construction forecast to increase $400 million along with a modest jump in medium to high price homes.
Thredgold noted the growth of high tech industries in Utah County and the resurgence of Geneva Steel. "The Utah County area has become a hot bed for high technology companies, with approximately 100 of these firms now in operation."
Geneva, employing about 2,400 workers, is now the second largest steel exporter in the nation since reopening in the latter part of 1987, he said.