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Banking and Finance
Eyes in the Sky
2014 Legislative Preview
At First Sight
Fast and Furious
Chefs for Hire
I love the start of a new year. It’s a time to begin anew and take a fresh look at life. I find it’s also agood time to take a pause, learn from the past and build a better tomorrow.
The Utah Legislature understands the value of this type of introspection and long-term thinking. Last month they took time out of their busy schedules to attend a Legislative Policy Summit hosted by the David Eccles School of Business. It was my job to brief them on Utah’s current economic positioning. Here’s what I told them:
The Great Recession thumped our state. We lost 104,000 jobs from the monthly employment peak to the monthly employment trough. Utah was the 18th hardest hit state and got hurt worse than the nation. Then … something really amazing happened.
The Utah economy popped. We leapfrogged 30 other states and the District of Columbia and emerged with the third-strongest recovery of any state.
What happened? Why did Utah’s economy show so much resilience, vitality and strength? The answer lies in a little bit of luck, some great decisions and strong economic fundamentals. Let’s take a look at each of these.
The multi-billion dollar investment by The Church of Jesus Christ of Latter-day Saints in City Creek Center could not have come at a better time. At peak construction, the project employed 1,700 construction workers right when the economy needed it most. The massive project would have added tremendous economic value any time, but during the worst economy of most Utahns’ lifetimes, it added even more value. We got a new downtown and the project put people to work in an otherwise gut-wrenching downturn.
The Utah Legislature made the decision to rebuild I-15 in Utah County at the perfect time. This massive public works project included 10 highway interchanges, 63 bridges, 385 lane miles and 2.6 million square yards of concrete pavement. At peak construction, it involved 1,600 workers, a godsend to many families in Utah. The investment not only served Utah’s long-term economic interest, it softened the blow of a terrible recession. Private investment was largely frozen on the sidelines, but Utah had a large public works project to lubricate economic activity.
The luck of City Creek Center and the smart decision about I-15 in Utah County played out over a foundation of strong economic fundamentals.
At the top of the list is our fiscal fitness. In Utah we set the gold standard. My checklist of fiscal responsibility includes a constitutional balanced budget requirement, AAA credit rating, line item veto, appropriation limitation and budget reserve accounts to save for a rainy day. Other states have some of these attributes; most do not have all of them. We have our governor and Legislature to thank for Utah’s top-of-the-class fiscal discipline among states.
Utah’s economic diversity also played a significant role in our recovery. The state’s residential construction industry took a nosedive, losing 40,000 jobs. Fortunately, other industries picked up the slack. Utah’s energy, technology and tourism industry made particularly strong contributions to the recovery. Utah’s economic diversity ranks fourth highest in the nation, an economic fundamental that improves our economic stability.
Another important factor in Utah’s economic success is our young, healthy and growing population. Our youthfulness means we have an affordable, tech-savvy workforce with low healthcare costs—a real cost savings to businesses. Utah’s median age is 7.5 years younger than the nation and the lowest among states. And it’s not just our youthfulness. Utah’s third-highest in the country population growth rate propels economic growth. Every year approximately 50,000 more Utahns are born in this state, which means we fuel demand with our growth.
A final fundamental Utah strength I’ll highlight is Utah’s global engagement. Utah’s merchandise exports doubled in the last five years. Primary metals (like gold, silver and copper) dominate, but the export of computers and electronics, transportation equipment, chemicals and food also increased over this period. Utah also has the most bi-lingual population per capita of any state, an attribute that makes our workforce even more attractive. And we are not resting on our language laurels. We have 20,000 Utah students in public education enrolled in dual-immersion language classes. In an increasingly global economy, Utah’s global engagement bodes well for the present and future.
I’m grateful our Legislature took the time to learn about the Utah economy. We stand today as one of the most well-positioned states in the country. Looking forward, everything is changing. We are growing, diversifying and aging. Our decisions really matter. And, as I reflect upon the beginning of a new year, I’m super pleased to be a Utahn.
Natalie Gochnour is an associate dean in the David Eccles School of Business at the University of Utah and chief economist for the Salt Lake Chamber.