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Coal's future uncertain, challenge now is to diversify, economist says

Eric Martinson, DWFS economist


The economy in Carbon County isn't the best right now and has been going down for some time.

That was the estimate of Eric Martinson, the economist for the Utah Division of Workforce Services, in his remarks to the Carbon Chamber of Commerce luncheon last Thursday.

And almost all of that is tied to the coal industry.

"People associate economists with weather people; weather people may be right some of the time," said Martinson. "We look at the economic climate, evaluate the present and look at the future."

While that future will certainly include coal mining, coal mining support business and energy production in general, the message he left with the group was that things are not good.

"There looked to be a growth rate in Carbon County between 2004 and 2007," said Martinson. "We projected it as an expansion, but the economic crash changed that. That, along with the increase of use of oil and natural gas for power generation has made it really hard for Carbon County in terms of economic growth."

Martinson said that Utah has been and is within the top five or six state economies in the United States. However, Carbon's economy is centered on coal, unlike other places in the state that are growing and have a diversity of economic drivers.

Utah's unemployment rate is 4.7 percent. Carbon County's July rate is about 6.5 percent.

"To find the rate of unemployment we look at the non-farm payroll in the area," he stated. "It is based on those that have unemployment insurance. It doesn't cover home businesses or lone businesses in the area."

As almost resident knows, coal production, employment and the coal industry's health impacts the area greatly. While retail trade employs the most people, all industries are affected by how coal is doing.

"Retail trade is 12 percent of the entire economy's employment and IT is the largest segment of that," said Martinson. "Other important sectors are health care, education and administration. However, mining's impact is 90 percent of the economy. It impacts retail, health care and education. It drives these other factors. All industry is related to how mining does in the area."

So as coal goes, so goes the area's economy. That trend shows in the figures.

"Mining employment has been on the decrease since 2009," he told the group. "Stable natural gas prices have added to this. Based on everything we are hearing the prospects in coal mining aren't good. Anyone who talks to people in the coal mining industry will probably hear this this from them as well. They would have a more unique perspective on this. There is less and less investment in the coal industry."

He did say the downward trend in jobs would probably level off in 2014. He also said there are some good trends in retail in the area, because after many quarters of dropping, in the last three quarters spending on retail goods has gone up in Castle Country. That is largely judged by sales tax revenue records from the area.

Construction is also another area where growth is measured.

"In construction, from Jan. 1 through April of this year the area was 88 percent below last year in activity," he said. "But summer is a big construction time and I wouldn't get to hung up about that. Those are the most current figures we have at this time People in the construction industry might have more current data on that. It has however been negative for 2011 and 2012 and now it appears to be so into 2013. Permitted construction values are basically the same thing."

Martinson has some advice for those looking to train for jobs or for retraining. The place to go is into health care.

"The baby boomer generation will assure that those services will be needed. This is a more certain area in which to be employed," he said.

He also brought up the fact that the economy of Emery County is very important to Carbon as well. The new nuclear plant in Green River could change things, and certainly any other energy development south of Carbon will be important.

He also pointed out that household income in the area has not been as strong as it once was.

Martinson said he wished he had better news, but it is what it is.

"What is left for policy makers in Carbon County is to how to diversify its economy in light of the condition of the coal industry here in Carbon County," he concluded.

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