Carbon County posts dipping unemployment levels in June
Local unemployment rates declined sligwhtly in June, dipping from the 4.7 percent level reported in May to 4.5 percent.
The jobless number, however, is nearly a full point higher than the 3.4 percent rate registered in Carbon County last June.
The 4.7 percent translates to 449 individuals unemployed in a 10,032 total job pool in Carbon County.
While the number has increased, economic development officials continue to assert that inadequate workforce is one of the chief stoppages to sizable business development in the area.
At the state level, the department of workforce services estimated Utah's non-farm wage and salaried job growth for June 2008 at .9 percent compared to 2007.
The employment expansion rate continued the recent deceleration in the state's employment picture.
Approximately 11,500 employment opportunities were created in the Utah economy during the last 12 months, raising total statewide wage and salary employment to 1,272,400.
Utah's second primary indicator of labor market conditions - the unemployment rate - measured at 3.2 percent in June, compared to last year's 2.7 percent figure.
Approximately 44,800 Utahns were considered unemployed in last month compared against 36,400 in June 2007.
At the national level, the United States' unemployment rate remained unchanged at 5.5 percent in June.
"The summer months exposure of the declining construction atmosphere, compared to last year's vibrant market, continues to be the dominant influence upon Utah's employment environment," noted Mark Knold, department of workforce services economist. "Whereas a year ago, the construction market had added 10,000 jobs over the previous year, this year nearly 11,000 jobs have been shed."
"Some Utah industries are stagnant, others vibrant, but residential construction is currently the lone bad apple and its downturn is so significant that it is dragging down Utah's overall employment growth numbers," continued the DWS economist.
"Considering the negative dynamics currently surrounding the housing market and the mortgage lending activities, it is anticipated that this market will not stabilize until 2009 at the earliest. The point is that even with some segments of the Utah economy holding its own, the construction industry is currently a heavy albatross," indicated Knold.
As employment expansion pulls back in many Utah industrial sectors, two growth leaders are emerging - education/health services and government, according to the latest data compiled by the department of workforce services. The two sectors are not showing negative strains from the current economic slowdown.
The industries' common denominator, which leads to their immunity, is that they are more influenced by the size and expansion of the local population than by external economic factors.
In fact, government has a history of moving opposite of the economic flow,, explained the DWS economist.
As the economy weakens, the demand for government services increases.
When the economy improves, service needs tend to decrease.
But not only can a slow economy raise the demand for public assistance, it can also push more people into the education system as education becomes an alternative choice to fewer job opportunities.
Outside of construction and financial activities, the remainder of Utah's industrial sectors posted growth in the past year, but many pulled back.
For example, the state's trade, transportation and utilities sector showed annual growth of 6,500 jobs in January. But the expansion rate slowed in June to 4,600 new jobs.
The professional and business services sector was growing by 4,500 jobs in January, but dropped to 3,300 employment opportunities in June.
The trend leans toward slowing and, in some cases, the situation will move several Utah industries onto the negative side of the ledger, pointed out the DWS economist.
Analysts anticipate that manufacturing and possibly the trade, transportation, and utilities sector will join construction and financial services in counting fewer jobs during the year by the latter months of 2008.
As noted, the construction industry is already negative, posting nearly 11,000 fewer jobs than recorded last June.
The construction sector currently stands as the biggest drag on the Utah economy, but other industries appear to poised to join in.
However, no industries in the state will have the negative influence that construction is exerting, noted Knold.
Utah's recent construction boom started in 2003.
The combination of rapidly-falling mortgage rates and surging Utah household formations set off a residential building boom that lasted into 2007,
The year prior to the boom's inception - 2002 the state approved the construction of 19,500 new homes.
At that time, Utah's total construction employment stood at 68,300.
Housing permits increased and peaked in 2005 at 28,300 and 26,300 in 2006.
In addition, non-residential construction started to boom in 2005. By 2007, the combined activity raised construction employment statewide to 103,500, representing 5,200 jobs higher than in pre-boom 2002.
With the bottom currently falling out of residential permitting - projected to be 13,000 homes in 2008 - the industry lacks the impetus to keep construction workers employed.
At the present time, nearly 11,000 construction workers have been removed from Utah's labor force.
But the probable continued lack of housing activity across the state suggests that another 11,000 construction employees may yet be shed during the next year, indicated the department of workforce services economist.
The prospects of the Utah housing market rebounding next year are currently not good.
The demographics exist to fuel construction as the surge of Utah household formations continues, but the economic factors needed to facilitate the matching growth are currently negative.
The negative factors include housing prices, increased mortgage lending requirements and the economy struggling to adjust to steadily rising energy costs and climbing inflation rates.
"To see how a slumping construction market can drag down a whole economy, one needs only look at the Provo and St. George metropolitan areas," explained the DWS representative. "These were recent high flyers, with St. George seeing employment growth of 10 percent for several years and Provo seeing 6 percent employment growth as recently as last year. But both are now in negative territory in terms of overall jobs, meaning fewer total jobs now than were counted a year ago. Both of these areas had big housing booms that have now gone bust and it illustrates how one industry's excessive negativity has the ability to overshadow the entire economy."