DAVID ECCLES SCHOOL OF BUSINESS Utah Economy Summary
DAVID ECCLES SCHOOL OF BUSINESS Utah Economy Summary and Insights
Summary 1. Prosperous time - But slowing… 2. Trends to watch - Fertility Housing Utah County 3. Insights - Next downturn? Follow the nation…
DAVID ECCLES SCHOOL OF BUSINESS Prosperous Time
Job Growth by State November 2017 -2018, Seasonally Adjusted Source: Bureau of Labor Statistics
Utah Economic Cycles Annual percent change in jobs August 2012 – August 2013 12. 00 10. 00 8. 00 6. 00 4. 00 (2. 00) 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018(e) 2. 00 (4. 00) (6. 00) Source: Utah Department of Workforce Services U N I V E R S I T Y of U T A H • D A V I D E C C L E S S C H O O L of B U S I N E S S
Job Growth Year-over percent change in non-farm jobs Source: Utah Dept. of Workforce Services
Utah Job Growth by Industry November 2017 -2018 Source: Utah Dept. of Workforce Services
DAVID ECCLES SCHOOL OF BUSINESS Trends to Watch
Oh mother, where are thou? Total Fertility for Utah and the United States Total fertility rate 4. 5 4. 0 3. 5 3. 0 2. 5 2. 0 1. 5 1960 1965 1970 1975 Utah 1980 1985 U. S. 1990 1995 2000 2005 2010 2015 Replacement Level Source: National Center for Health Statistics
Utah Housing Shortage 2011 -2017 Households Exceed Units by 50, 800 Housing Units 111, 455 Households 162, 288 0 50, 000 100, 000 150, 000 200, 000 Source: U. S. Census Bureau and Ivory-Boyer Construction Database.
Utah Net Migration 30, 000 27, 091 24, 261 25, 000 23, 248 21, 671 20, 000 15, 000 11, 300 9, 032 10, 000 4, 919 5, 000 1, 550 - 1, 641 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 - 5, 000 Source: Kem C. Gardner Policy Institute, Utah Population Committee
Income Not Keeping Pace w/ Home Prices Percent change in median income and housing prices in Utah 60% 50% 40% 30% 20% 10% 0% 48. 0% 20. 8% 2013 2014 Income 2015 2016 2017 2018 Housing Prices Source: Utah. Real. Estate. com and U. S. Census Bureau.
Utah’s Silicon Slopes Corridor Key Stats • 25 miles • 17 cities • 74, 744 net new jobs since 2010 • 283, 702 total jobs • 37% of increase in jobs statewide 2010 -2017 • Annual growth averages 6. 9% Source: Kem C. Gardner Policy Institute
States with Most Robust Job Growth With and without Utah County -- August 2017 – August 2018 ACTUAL WITHOUT UTAH COUNTY Utah Nevada Washington 3. 7% 3. 5% 3. 4% Nevada Washington Idaho 3. 2% Texas 3. 2% Utah Arizona 3. 0% 3. 5% Arizona 3. 4% 3. 2% 3. 1% 3. 0% Source: Gardner Policy Institute Analysis of Utah Dept. of Workforce Services and U. S. Bureau of Labor Statistics data
Employment: Western Metros Source: Moody’s Analytics
DAVID ECCLES SCHOOL OF BUSINESS Insights
My thoughts… • A little honesty – We can’t predict the timing of an economic cycle. • Durability – Current expansion will turn 10 years old in June. • Recession watch – Gov. Herbert won’t let his staff use the “R” word. • Coming into view – Even still, the next downturn is coming into view. • Keep eye on nation – Utah will follow national economy, but do better. Source: Kem C. Gardner Policy Institute
-6% 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 e 12% Annual Job Growth Utah and the U. S. 10% 8% 6% 4% 2% 0% -2% -4% Note: e=estimate Source: Utah Department of Workforce Services Utah United States
0% Source: Bureau of Economic Analysis Utah United States Government Other Services Leisure & Hospitality Ed. & Health Svcs. 2. 8% 2. 1% 3. 4% 4. 1% 12. 5% 12. 6% 11. 2% 12. 5% 7. 4% 8. 7% 5. 1% 5. 4% 21. 9% 20. 8% 24% Prof. & Business Svcs. Financial Activities Information 17. 2% 16. 3% 20% Trade, Trans. , & Utilities 12% 10. 6% 11. 2% 16% Manufacturing 6. 1% 4. 0% 8% Construction 1. 9% 2. 2% 4% Ag. , Nat. Res. , & Mining Gross Domestic Product by Industry: 2017 28%
Utah Economic Cycles and Recessions Annual percent change in jobs August 2012 – August 2013 8. 00 Stagflation; Monetary Policy Great Recession 9/11, Dot. Com, Post-Oly 6. 00 4. 00 2. 00 (6. 00) Source: Utah Department of Workforce Services U N I V E R S I T Y of U T A H • D A V I D E C C L E S S C H O O L of B U S I N E S S (f) 19 17 (4. 00) 20 20 15 20 13 20 11 20 09 20 07 20 05 20 03 20 01 20 99 19 97 19 95 19 93 19 91 19 89 19 87 19 85 19 83 81 19 (2. 00) 19 19 79 -
Inversion Season Difference between short- and long-term rates Source: Federal Reserve Bank of St. Louis
Fiscal Policy Federal budget deficit -400 7 $ Billions (L) -600 6 -800 5 -1, 000 4 -1, 200 Share of GDP, % (R) -1, 400 3 -1, 600 2 14 15 16 17 18 F 19 F 20 F Source: BEA, Moody’s Analytics
Animal Spirits Index Note: Index includes S&P 500 index, Conference Board Consumer Confidence Index, yield spread and economic policy uncertainty index. Source is Wells Fargo Securities.
Utah CEOs less optimistic What is your expectation for the economy six months from now? Source: Utah CEOutlook Confidence Index
What to watch • Rising costs/”Labor, lots and lending” • Risk taking • Policy steps/mis-steps o Spending and deficits o Trade policies o Immigration policies o Political chaos • Exogenous shocks o Brexit Source: Kem C. Gardner Policy Institute
Kem C. Gardner Policy Institute David Eccles School of Business | 411 E. South Temple Street Salt Lake City, UT 84111 | 801 -585 -5618 | gardner. utah. edu Facebook. com/gardnerpolicyinstitute | Twitter. com/Kem. Gardner. Inst | Linked. In
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