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DWS Releases Economic Data, Negative Impacts Of Layoff Remain Unexplored

The Crandall Canyon tragedy, coupled with UtahAmerican's decision to lay off 170 employees at the company's Tower mine in Carbon County, will have a negative impact on the local economy.

The degree of the impact remains under evaluation, but the latest data compiled by the Utah Department of Workforce Service indicate that Carbon County's employment expansion rate had already slowed significantly in first quarter 2007.

Compared to the employment data reported in first quarter 2006, the county managed to add 39 jobs, representing a 0.4 percent annual growth rate.

While the growth rate slumped in the quarter, the situation was not grave, pointed out DWS regional economist Michael Hanni prior to the Crandall Canyon collapse on Aug. 6 and the 170-miner layoff announced by UtahAmerican on Aug. 26.

For example, a layoff at a local firm caused the loss of nearly 90 employment positions in the county between 2006 and 2007, noted the DWS regional economist.

Offsetting the losses, construction, mining and accommodations posted significant employment expansion rates.

Construction, in particular, grew strongly during the one-year period, adding nearly 70 positions in Carbon County's labor force.

In neighboring Emery County, first quarter 2007 employment data reflected a fairly significant cooling of the area's economy in terms of job growth, noted Hanni.

The primary factor for Emery's lackluster job growth may be attributed to the temporary closure of several mines in the county. But Emery County's economy added jobs in the construction sector and administrative support services.

Manufacturing employment has often been advocated as a needed spark to generate economic growth in Utah's rural counties, noted the DWS regional economist. However, theory and reality have frequently clashed. While manufacturing jobs are higher paying and skill intensive, the employment opportunities cannot simply be willed into existence.

"Compared with tourism-related industries where you are the product and the consumer comes to you, manufacturing in a rural area has much steeper demands in terms of infrastructure and relative costs," explained Hanni. "With a much lower economic density, higher transportation costs and limited access to labor, rural areas face hurdles that metro areas never have to confront"

Hurdles aside, manufacturing employment in Utah's southeastern region has started to recover after suffering a recession during 2003 and 2004, continued the DWS economist. Machinery and metal manufacturers have recorded climbing employment opportunities in the last two years. But the companies generally add jobs when local customers - primarily coal mining firms - restart or increase operations.

The majority of the area's remaining manufacturing firms also focus on supplying or servicing the mining industry. While the business practice can be successful, it does not insure long-term employment stability, pointed out Hanni.

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