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Southern Utah: Its outlook on tourism, housing and jobs

With national and state parks, loads of tourists and plenty of sunshine, southern Utah is thought of as a vacation destination. But to the more than 200,000 residents who call it home and rely on the breathtaking backdrops and awe-inspiring views for their livelihoods, it is so much more. It’s a tight-knit community where businesses and families can thrive.

In general, the economy in southern Utah is booming, with larger counties faring better than smaller ones. On the travel, real estate and employment fronts, things are looking picture perfect. “There is an overall feeling of success here. We did take a hit during the recession, but we jumped back and we’re doing better economically than we did before the recession,” says Pam Palermo, president and CEO of the St. George Area Chamber of Commerce.

Come one, come all

The hidden gem of southern Utah has been discovered. The area experienced record tourism numbers last year, due in part to the “Mighty 5” campaign, which encourages people to visit Utah’s five national parks. “The Road to Mighty,” another Utah Department of Tourism campaign, launched last year to encourage tourists to explore road trips that stop in smaller monuments and state parks on the way to national parks. “And so that’s good for our state parks,” says Chris McCormick, president and CEO of the Cedar City Chamber of Commerce.

The new Beverly Taylor Sorensen Center for the Arts, home to the Utah Shakespeare Festival, is also a big tourist draw. The festival brings hundreds of thousands of visitors to Cedar City, and the new center brings the festival closer to downtown. “The opening of the center has had a ripple effect and generated a lot of entrepreneurism in our downtown, with the opening of a few restaurants and other businesses. It’s a big driver our community,” says Danny Stewart, economic development director for Cedar City and Iron County.

In Kane County, the hospitality industry is the largest sector of the economy. Kelly Stowell, executive director for the Center for Education, Business and the Arts and the Kane County Film Commission, notes two new hotels built in Kanab in 2016 and the opening of new restaurants. “We’re right in the middle of the Grand Circle. The north rim of the Grand Canyon, Bryce Canyon and Zion are all within the vicinity of Kanab. Our goal is to become a destination link without people driving through on their way to somewhere else,” she says.

A place to call home

The sandstone is not the only thing in southern Utah that is red hot: the housing market is also. The Southern Utah Home Builders Association (SUHBA) represents approximately 650 building industry professionals located throughout Washington County and works to protect and promote the home building industry.

“Our goal is to keep housing strong, because it is key to our local growing economy,” says Mari Krashowetz, executive officer with SUHBA. “We’ve determined that if you build 1,000 average single-family homes, it creates just under 3,000 jobs and generates over a $111 million to local, state and national government.”

In the home building industry, the three Ls of lots, labor and lending are used to gauge the health of the industry.

SUHBA saw the highest number of lot sales in the last five years with over 1,800 lots sold and over 1,700 building permits issued in Washington County, the highest level since the end of the recession, says Krashowetz. Home owners are building equity and many use it as a long-term investment.

And the robust homebuilding sector is not limited to St. George and Washington County. In 2016 Kanab issued a record-setting 122 new building permits, beating the previous record of 84 in 2015 for new residential construction.

“We currently have about a 36-month supply of lots,” says Krashowetz. “During the housing boom, we saw over 156 months of supply. Lot supply is down, and developers are working hard to develop more lands for lots.”

On the labor side, things are getting uncomfortably tight. “During the downturn in the economy, many workers changed professions or moved outside of the area and we haven’t seen a full recovery on that front yet,” Krashowetz notes.

To help address that shortage, SUHBA is developing programs to promote careers in homebuilding. She notes that as demand continues to grow, so will wages.

As far as lending, Krashowetz wants to make sure SUHBA continues to work with lending companies to ensure that people in the home buying market get qualified to purchase a home and restrictions do not become too cumbersome.

Help wanted

With rapid growth comes increased competition for qualified employees. “Washington and Iron counties are experiencing the strongest job growth since the end of the recession,” says Lecia Langston, regional economist with the Department of Workforce Services.

According to Langston, Washington County experienced the fastest job growth in the state at 7 percent between September 2015 and September 2016. In Iron County the big growth is in the construction, leisure and hospitality, and health and social services industries.

But the smaller counties are not seeing the same growth. Beaver County, which experienced layoffs in the mining industry, was down 200 jobs. In tourism-dependent Kane County, the leisure/hospitality industry lost about 70 jobs.

Compared to the state average of 3.2 percent unemployment, Washington County remains on equal footing and Iron County is 4.2 percent. The smaller counties have higher unemployment with Kane County at 5.2 percent and Garfield County’s seasonal economy at 6.8 percent. These numbers are as of November 2016.

When you mix rapid job growth with low unemployment rates, the result is pressure on wages, says Langston. That’s good if you are an employee, but not so great if you’re an employer.

“The fact that we’re seeing broad-base expansion across several industries is a great indicator. When we get nice broad-base expansion, then it shows the economy is on a strong footing. That’s what we like to see,” Langston says.

In Cedar City, Stewart points to the expansion of several local companies and the addition of a new manufacturer for bringing hundreds of new jobs to the community.

Genpak and Charlotte Pipe are both expanding their operations and adding new production lines. Genpak, a food container manufacturer, is expanding into a second building. It hired 72 full-time employees and 30 temporary workers so far and anticipates adding 60 – 80 new jobs in the next 24 months. Charlotte Pipe, a PVC pipe manufacturer, is building a second building and adding approximately 30 new jobs.

Décorworx, a premiere supermarket interior design company, will be refurbishing a historic building and hiring 160 employees. Mueller Industries, a copper pipe manufacturer, recently announced it is opening a facility in Cedar City and plans to hire 125 employees.

Its high altitude and average 290 sunny days per year make the Cedar City area an ideal place for solar power. A dozen utility-scale solar projects have been built in Iron County in the past few years. “There are currently 500 megawatts of commercial power being generated on more than 3,500 acres, and these projects created over a thousand temporary jobs and brought about a billion dollars of investment into the county,” Stewart notes.

According to Palermo, in Washington County the exciting news is on the technology and entrepreneurship fronts. “Those fields are at the top of our growth list in 2017,” she says.