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2014 Economic Forecast
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Salt Lake Area
Northern Utah Area
Exports to Hong Kong fell by 34 percent. On the other hand, exports to Canada rose by 155 percent. Utah sends drilling equipment and agricultural products to Canada.
“We are a little nervous about how the global economy is going, given the uncertainties and the other challenges we have,” says Cramer.
But Shumway says the global situation is not that dire. “Most economists expect the global economy to grow at about 4 percent next year, and that will really help propel things in the United States,” he says. He notes that while China’s growth has slowed, it dropped from a roaring 9.4 percent to a brisk 7.7 percent, on average.
“For the first time in a year and a half, Europe’s economy grew,” Shumway adds. “Most people don’t realize that Europe’s economy shrank for five quarters in a row… Our recession paled in comparison to the depth and the length of Europe’s recession. And last quarter was the first quarter they experienced positive economic growth.”
While the global economy is a significant contributor to Utah’s economic health, the most pressing threat comes from the national political scene.
“The primary obstacle for the Utah economy is not one for which we have any control, and that’s the intransigence and polarization that we’re witnessing in Washington, D.C. Our federal elected officials are not fixing the fundamental, systemic problems facing our country. So like an anchor around our neck, Utah will continue to be weighed down by this malaise,” says Shumway.
Thorn says the uncertainty surrounding issues like sequestration, the debt limit and the implementation of the Affordable Care Act is making it hard for businesses to expand or plan for the future.
“There’s a lot of ‘what ifs’ that people in our industry are having to consider every day,” he says. “The worst thing for business is an unknown.”
The construction industry is also waiting for Congressional action on immigration reform and hoping for a resolution to the budgetary stalemate that includes generous federal funding for badly needed infrastructure projects.
“What happens in Washington, D.C. is going to have a big impact on our industry,” says Thorn.
Despite these potential obstacles, Utah’s economy is still in a much better position than most, and Mayne says there is reason to believe 2014 will be even stronger than this year was.
Shumway says, “We will continue to grow comparatively faster than the rest of the country, but until the national government unshackles the states, our growth will continue to be obstructed.”