SALT LAKE CITY — With the new year underway, the state is embarking on a journey that hopefully will be as economically prosperous as 2016, according to a panel of Utah’s top economic analysts.
“Utah’s economic performance was among the strongest in the nation in 2016. Our state added jobs at more than twice the pace of the nation, and our unemployment rate is the lowest it’s been in more than eight years,” said Juliette Tennert, director of economic and public policy research at the Kem C. Gardner Policy Institute and Utah Economic Council co-chairwoman. “We expect that growth will moderate in 2017, but Utah’s economy will continue to be a top performer among states.”
Members of the Utah Economic Council spoke Wednesday at the Salt Lake Chamber of Commerce's annual Utah Economic Review at the Grand America Hotel in downtown Salt Lake City. The council presented its report to Gov. Gary Herbert at the event attended by hundreds of local business and civic leaders.
The report described the state’s economy as "healthy" with expansion across all major industrial sectors in 2016, producing 49,500 new jobs last year. The state’s annual employment growth rate of 3.6 percent was one of the strongest in the nation, the report stated.
In order to sustain that momentum, Utah’s long-term priorities should include developing a solid pipeline of qualified workers through the state’s education system, explained Carrie Mayne, chief economist for the Utah Department of Workforce Services.
“It’s not just about educating more, it’s about educating in the right ways,” she said. “We have to ensure there is alignment between education and workforce. It really is not just about feeding that education pipeline blindly, but doing it in a smart and efficient way.”
Paul Dean, a council member and chief economist with the Governor's Office of Management and Budget, said long-term planning should be among the most important priorities to business leaders in the coming year and beyond if the state is going to maintain its current economic strength going forward.
Last year, Utah’s construction sector posted the highest job growth at 6.8 percent, driven in large part by strong activity in the residential and commercial markets, said Jim Wood, senior fellow at the Gardner Institute. He noted that commercial construction statewide climbed to historic levels in 2016, reaching $2.5 billion with the development of major projects such as the expansion of Dixie Regional Medical Center in St. George, Utah Valley Hospital in Provo and the construction of a 1,700-acre solar plant in Delta.
Mayne said that last year saw exceptionally low unemployment and increasing wages for working Utahns, along with growth in travel and tourism. The state’s Utah’s ski resorts and national parks hosted a record number of visitors in 2016, contributing to exceptionally strong job growth of 6.1 percent in the state’s leisure and hospitality sector, she said.
The consensus forecast predicts moderating, but still healthy, job and wage growth, low unemployment and increased net in-migration in 2017, she said.
Among the internal risks to the local economy include the supply of qualified workers, education and air quality, the report stated.
In addition, potential changes to federal trade policy and monetary policy, along with geopolitical volatility, could also present challenges, explained Darin Melott, Utah Economic Council member and southwest region director of research and analysis for commercial real estate firm CBRE.
He said the state has numerous advantages over other states, including a business-friendly climate with favorable demographics and a large pool of well-educated workers. He also said the state should focus more on marketing the state’s growing business and economic profile.
“It’s telling the Utah story and ‘working on our state’s brand,’” Mellott said. “We have an advantage to be able to attract talent — smart public-private partnerships (that) we do better than anybody.”