Outlook report attributes Utah's economic slump to national, global recession
Utah's economy slowed down during 2001, especially following the Sept. 11 terrorist attacks on the United States.
The rate of employment growth across Utah dropped from 6.2 percent in 1994 to 0.9 percent in 2001, indicates the latest economic report submitted to the governor's office.
The report attributes Utah's economic and employment slowdown to the far-reaching impacts of the global recession.
The recession in the United States should be relatively short and growth will resume at a moderate rate during the second half of 2002, predicts the report to the governor's office.
In Utah's case, budget analysts expect the state to experience a short pause in job growth after the Winter Olympics. The brief economic pause should be followed by moderate expansion statewide as 2002 closes.
Utah's 2002 unemployment rate should register lower and job expansion should register higher than the national average, points out the economic outlook.
But the pace of economic activity witnessed across the state will remain considerably lower than the pace Utah experienced during the late 1990s.
Utah's population growth should slow in the upcoming months, indicates the report to the governor's office.
Reflecting the Olympics frenzy, net migration remained strong in 2001, with approximately 14,200 more people moving into the state than leaving.
In 2002, net migration is expected to fall to 3,000. However, with a record number of births anticipated to occur in the state, Utah's population will grow 1.7 percent in 2002.
The projected population expansion is significantly lower than Utah registered during the mid-1990s, but continues to register considerably higher than the national average.
Utah's current slowdown occurs against the backdrop of a weak international economy and a broadening U.S. slump, explains the outlook report.
Virtually all of the world's major industrial economies are in recession.
As the United States recovers in 2002, the worldwide economy should improve.
With the current slack in world demand, Utah's exports are in the neighborhood of $1 billion or 25 percent lower than the state could expect with robust growth overseas, points out the report compiled by budget analysts
For the United States, 2002 will be a year of moderate recovery and consumer spending is expected to increase by 1.3 percent.
The gross domestic product is projected to grow only 0.4 percent as investment falls 5.3 percent.
However, growth will become stronger in the second half of the year.
Positives for businesses and consumers include low interest rates and a stable inflation outlook.
While Utah and the mountain states experienced robust economic expansion in the 1990s, growth has slowed steadily within the last few years.
Utah has managed to rank in the top 10 states in income growth, but has slipped to slightly below average in recent reports.
The economic picture in Utah is directly paralleling the performance of the mountain region, which has dramatically slowed in 2001.
The broad-based and rapid expansion reflected Utah's deepening integration with the national economy, points out the outlook report to the governor's office.
The global contraction has dampened commerce between Utah businesses and suppliers as well as customers in outside states and foreign countries.
With instate construction continuing to decline, a booming economy-wide recovery in 2002 is unlikely.
Although the economy has slowed, Utah continues to outperform the nation and the current situation represents a temporary pause, indicates the outlook report to the governor.