Utah Economic Report
The Governor’s Utah Economic Summit April 10, 2012
Innovation and
Investment
Olympic Math Viewers -- 2.1 billion from 160 countries
Guests of state -- 350 VCs and 600 corporate guests
World leaders -- 77 countries and 8 presidential Cabinet members
Visitors – 220 thousand
Print media -- $22.9 million in earned advertising
Torch relay -- 11,250 people carried the torch in 46 states
Subsequent games -- Torino and Vancouver Games
Subsequent events -- Seven World Cups or U.S. Championships
“The Olympics remain the most compelling search for excellence that exists in sport, and maybe in life itself.” - Dawn Draser, Australian swimmer, 3-time winner of Olympic Games.
Utah Economic
Basics
$115 Billion
Gross State Product
Rank 33rd
In size among states
Less than 1%
of U.S. economy
Utah job growth 2.5%
Compared to 1.6% nationally
Fastest Growing Economies
Source: GOPB Analysis of Bureau of Economic Analysis Data
Job growth Feb. 2011 – Feb. 2012
0.0% 2.0% 4.0% 6.0% 8.0%
Louisiana
Colorado
Texas
Utah
Oklahoma
North Dakota
2.1%
2.2%
2.6%
2.7%
2.8%
6.8%
Year-Over Percent Change
Utah has the third fastest growing economy in the country
Gross Domestic Product by Industry 2010
3%
5%
13%
17%
4%
22%
11%
7%
3% 3%
14%
3% 4%
12%
14%
5%
21%
12%
9%
6%
2%
13%
0%
4%
8%
12%
16%
20%
24%
Ag. Nat'l Res. & Min
Const. Mfg. Trade, Trans., & Utilities
Information Fin'l Prof. & Bus. Services
Educ. & Health
Leisure Other Serv. Gov't
Utah U.S.
Source: Bureau of Economic Analysis
Economic Diversity
90.8
91.6
91.8
92.1
92.2
92.7
93.3
93.6
94.0
95.3
88 89 90 91 92 93 94 95 96
Florida
Washington
Minnesota
Tennessee
Utah
California
Pennsylvania
Colorado
Missouri
Illinois
Source: GOPB Analysis of Bureau of Economic Analysis Data
Hachman Index: Ten most diversified economies in the country
Utah Employment
1,020
1,070
1,120
1,170
1,220
1,270
1,320
00 01 02 03 04 05 06 07 08 09 10 11 12
Source: U.S. Bureau of Labor Statistics; March 2012
Seasonally adjusted
Peak to trough a loss of 80K-90K jobs!
PEAK
Trough
Utah Job Growth Monthly Year-Over Percent Change
-4.4% -4.1%
-3.3% -3.1%
-2.8% -2.9%
-2.3%
-1.9%
-1.4%
0.7% 1.0%
1.5% 1.5% 1.5% 1.2%
1.5%
0.8%
1.5% 1.8%
1.6% 1.5% 1.6%
2.1%
2.5%
2.9% 2.7% 2.7%
2.5% 2.5% 2.6% 2.5%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
Au
gust
-09
Sep
-09
Oct
-09
No
v-0
9
Dec
-09
Jan
-10
Feb
-10
Mar
-10
Ap
r-1
0
May
-10
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
Dec
-10
Jan
-11
Feb
-11
Mar
ch-1
1
Ap
r-1
1
May
-11
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct
-11
No
v-1
1
Dec
-11
Jan
-12
Feb
-12
Source: Utah Department of Workforce Services and Salt Lake Chamber
Modest expansion
Healthy expansion
Utah Job Growth Monthly Year-Over Percent Change
-4.4% -4.1%
-3.3% -3.1%
-2.8% -2.9%
-2.3%
-1.9%
-1.4%
0.7% 1.0%
1.5% 1.5% 1.5% 1.2%
1.5%
0.8%
1.5% 1.8%
1.6% 1.5% 1.6%
2.1%
2.5%
2.9% 2.7% 2.7%
2.5% 2.5% 2.6% 2.5%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
Au
gust
-09
Sep
-09
Oct
-09
No
v-0
9
Dec
-09
Jan
-10
Feb
-10
Mar
-10
Ap
r-1
0
May
-10
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
Dec
-10
Jan
-11
Feb
-11
Mar
ch-1
1
Ap
r-1
1
May
-11
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct
-11
No
v-1
1
Dec
-11
Jan
-12
Feb
-12
Source: Utah Department of Workforce Services and Salt Lake Chamber
Training wheels
Free-riding
Utah Job Growth by Industry February 2012
0 2 4 6 8 10 12
Government
Other Services
Leisure and Hospitality
Education and Health
Prof. and Business
Financial Activities
Information
Trade, Trans, Utilities
Manufacturing
Construction
Natural Resources
Total
0.0
2.1
0.3
3.0
3.9
4.4
4.5
1.9
4.3
4.9
10.1
2.6
Year-Over Percent Change
Source: Utah Department of Workforce Services
Critical issues
Discouraged workers
Housing
Oil prices
Discouraged Workers
Pre-recession labor force participation rate 72%
Post-recession labor force participation rate 66%
50
55
60
65
70
75
76 81 86 91 96 01 06 11
Utah Labor Force Participation
Source: U.S. Bureau of Labor Statistics; LAUS: January 2012 LAUS = Local Area Unemployment Statistics
Employed
Unemployed
Number of unemployed if participation rate of past 20 years held – 133,600 people
Employed % at a 28 year low
No significant change in last recession
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1,600,000
1,700,000
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Utah’s Potential Timeline to Recovery
Trend without the Recession
Recovery Path
Employed
Housing
0
5
10
15
20
25
30
19
73
19
74
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
f
20
13
f
20
14
f
Th
ou
sa
nd
s o
f U
nit
s
Single-Family Multi-Family Total
Utah Residential Construction Activity
Source: University of Utah, David Eccles School of Business, Bureau of Economic and Business Research
Utah’s Housing Stock
Year Housing Stock Housing Stock Change
Excess Housing Inventory
2010 982,400 10,900 18,600
2011 991,900 9,400 12,900
2012 1,000,600 8,700 6,900
2013 1,010,600 10,000 1,000
2014 1,023,600 12,500 -5,100
2015 1,039,200 15,600 -11,300
Ivory Homes, Ivory Institute
Oil Prices
Oil Prices 101 A penny increase in the cost/gallon costs consumers
$1.25 billion over the subsequent year.
Gas prices are up 60 cents since late 2011.
U.S. consumers will take a $75 billion hit this year.
If prices rise further the entire $100 billion tax cut will be erased.
“An issue ignored is a crisis invented.” - Henry Kissinger
U.S.
Concerns
Oil prices
European debt crisis
Policy paralysis
Over regulation
U.S. corporate tax rate
Utah
Concerns
National economy
Education
division/complacency
State-level immigration reforms
Infrastructure complacency
1st Law – For every economist there exists an equal and opposite economist. 2nd Law – They are both wrong.
- David Wildasin
Two Economic Laws
U.S.
Optimism
Best universities
Best capital markets
Best rule of law
Near-best demographics
Utah
Optimism
Downtown Rising
International trade
Marquee expansions
Internal population growth
Western hub
PAC 12 Public policy leadership