Report addresses factors in Utah economic contraction
Utah has started to experience contraction and analysts expect the state's economy to continue to moderately decline in the near future. But Utah's demographic characteristics and diversified industrial structure will position the state for long-term economic well being, predicts the latest report to the governor.
Utah continues to post population growth consistent with the levels registered during the late 1990's. In fact, Utah consistently ranks among the fastest growing regions in the United States.
According to the state population estimates committee, the total number of Utahns reached 2,295,971 in 2001, for a 2.2 percent increase or 49,417 residents compared to 2000.
Census 2000 results indicate Utah's population has jumped nearly 30 percent since 1990, explains the report to the governor. Utah ranked as the fourth fastest growing state in the nation during the last decade. Births accounted for approximately 60 percent of the expansion.
The rate of job growth in Utah peaked in 1994 at 6.2 percent in 1994 before slowing to an estimated 0.6 percent in 2001, notes the report. Non-agricultural employers added 6,700 net positions in 2001, constituting Utah's slowest job expansion since 1983.
While only a fraction of the state's long-term 3.5 percent average job growth, Utah's expansion registered higher than the rate posted nationwide.
Unemployment in Utah rose slightly to an estimated 4.4 percent in 2001, adds the report. Joblessness in Utah was lower than the national 4.8 percent rate.
Employment growth in Utah's major industry sectors were mixed last year, ranging from a decline of 3.4 percent in manufacturing and 1 percent loss in construction to a 4.6 percent increase in finance, insurance and real estate.
Utah's FIRE sector benefited from rapid job expansion in personal credit institutions, banks/credit unions and security brokers at locations throughout the state.
Services remains the largest sector in the state's economy, indicates the report. Services are followed by trade, government and manufacturing.
An 11-year expansion in the state's construction industry ended in 1999, with growth dropping 1 percent in 2001.
The contraction was anticipated due to the end of the pre-Olympic buildup.
Despite the Olympic-related drop, construction jobs as a percent of total non-farm employment still remained above the 24-year average witnessed within the state.
Manufacturing's declining expansion was primarily due to substantial layoffs at operations in Utah, points out the report to the governor.
Government employment grew at a rate of 3.1 percent, while services increased by 1.4 percent.
Transportation, communications and utilities diminished by 0.4 percent, trade declined by 0.2 percent and mining decreased by a rate of 2.5 percent.
Utah's exports expanded 8.9 percent to an estimated $3.5 billion during 2001.
Exports may be softening the effects of the national recession in the state, points out the economic report to the governor.
Utah's total personal income climbed by 4.6 percent last year, compared to the 3.7 percent increase posted nationwide in 2001, according to the latest economic report to the governor.
Non-agricultural wages in Utah climbed 3.6 percent, marking the seventh consecutive year that income increases across the state outpaced inflation as measured by the national consumer price index.
The 2001 downturn is expected to slow to personal income growth to 3 percent when data for 2002 are calculated.
Utah's economy remains balanced and diversified with a broad base of industries.
The balance and diversity are expected to continue to contribute to an expanding economy statewide, concludes the report to the governor.