SALT LAKE CITY — Utah's economy has been among the more robust and fastest growing in the nation, according to analysts from one of the country's largest financial institutions.
"The Utah economy is doing very well right now," said Wells Fargo economist Charlie Dougherty. "It's doing well for all the reasons you'd want to see an economy do well — mainly a fast-growing labor force (that) is very well-educated and young."
Wells Fargo reported that the Beehive State has consistently ranked as "one of the fastest growing economies in the country" in addition to boasting one of the lowest rates of unemployment.
Dougherty said the economy is also among the most diverse.
"You're seeing a lot of job growth, seeing a lot of people moving into the state, a lot of companies moving into the state and so there are a lot of good things happening in the state of Utah," he said.
The bank's report stated that collaboration between business, labor and government is among the reasons why Utah consistently ranks among the best states to do business. An increasing presence in prominent business sectors such as technology, including cloud computing, big data and software development, has raised the states economic profile nationally and internationally. He also noted the growth in aerospace and life sciences as reasons for Utah's positive economic outlook.
Utah boasted the third-fastest growth of any state in America last year as exports jumped 24 percent, the report stated. The dramatic increase followed two years of previous declines, according to the report.
Dougherty said Utah’s strengths are unmistakable when observing the most recent economic data that showed real gross domestic product, the total annual value of goods and services produced in the state, climbed at an annual rate of 4.4 percent during the third quarter of 2018 — the latest quarterly information available.
"Utah was the second-fastest growing right behind Washington," he said. The trend over the past two or three years indicated that Utah's economic growth has outpaced the national rate, he noted.
"The U.S. economy grew at about 3 percent in 2018, while Utah was growing in excess of 4 percent," he said. "And it's been above 4 percent for all of 2018."
Additionally, nonfarm employment rose 2.8 percent over the past 12 months, with stable increases apparent in all principal industry sectors, the report stated. The state's jobless rate held steady at 3.1 percent in February, around where it has been for the past two years, he said.
With the state's economic fundamentals on solid footing, he said Utah should expect to continue its growth trajectory for the foreseeable future, he added.
"When you have strong employment growth bolstered mostly by people and businesses moving into the state, and you have a fast-growing labor force, those are the building blocks for economic growth," Dougherty said. "Utah has those in spades."
The report stated that Utah's proximity to other tech centers in the West, along with the large talented workforce and relatively low real estate costs were prominent drivers in the development of the “Silicon Slopes” cloud computing cluster south of Salt Lake City as well as the “Bionic Valley” bioengineering hub located in the state capital.
Dougherty noted that while the state's and the nation's supply of workers is growing, the demand for talent is still outpacing the number of people with the needed skills. With unemployment at historically low levels, that trend is expected to continue and could affect businesses' ability to grow at some point.5 comments on this story
"That basically indicates that there are fewer and fewer people for companies to hire," he said. "So while they may want to expand, they just don't have the labor force to do so."
Some of that shortage can be alleviated by the in-migration of new talent and the relocation of companies from other states looking for a place with lowering operational costs and a ready pool of qualified labor, he said.
"Utah tops the list of (relocation alternatives) because you have a well-educated workforce, relative affordability (and) a growing economy which sets the stage for continued strong economic growth," Dougherty said.