Job One
Utah economic performance continues to lead the nation as measured by the growth pace of employment. The state also currently leads the nation in the rate of home price appreciation. The Utah economy added roughly 54,000 net new jobs during the most recent 12-month period, a growth pace of 4.5%. The latest 4.5% growth rate was more than 20% stronger than second-ranked Arizona.

The state continues to add jobs in all major job sectors. Job growth has been led by strong gains in construction; trade, transportation & utilities; professional & business services; education & health care; manufacturing; and financial activities.

Strong demand for labor has pushed the state’s unemployment rate to record lows. The Utah jobless rate averaged 2.4% in recent months, the lowest average rate within the 48 contiguous states. Tighter labor availability helped push Utah incomes from wages and salaries up 11.1% during 2006, versus a national rise of 6.3% (economy.com).

Competition for workers has been particularly challenging for smaller employers, who may not be able to match aggressive salary and benefit packages offered by larger employers with deeper pockets. Greater levels of net in-migration of recent years have helped meet the need for workers of all types.

Tech Value
Information technology and life sciences industries have seen impressive job gains in recent years, with more than 62,000 Utahns now employed in these sectors (Utah Technology Council). The value of these jobs? The average industry wage is 66% higher than the average Utah annual nonfarm wage!

More good news? The entrepreneurship-focused Kauffman Foundation recently ranked Utah first of the 50 states for economic dynamism, second in investor patents, fourth in fastest-growing companies, and fifth in venture capital (Deseret Morning News).

At a Minimum
Recent passage of the Fair Minimum Wage Act of 2007 will lead the nation’s minimum wage higher in three steps over the next two years. The minimum wage, stuck at $5.15 hourly since September 1, 1997, will rise to $5.85 hourly on July 24, 2007. The wage then jumps again to $6.55 per hour 12 months later, with a final boost to $7.25 hourly on July 24, 2009.

The change will have only a modest impact in Utah, where extremely tight labor availability had already pushed beginning wage levels higher during the past few years. Some workers will see a beneficial rise in their wages. However, the greater impact will be to moderately boost incomes of those workers whose wages were only slightly above a company’s beginning wage.

Around the Globe
Strong global economic growth of the past four years has helped boost demand for goods produced in Utah. The state’s merchandise exports rose 12.9% in 2006 to $6.8 billion. Shipments in 2006 were also 50% greater than in 2002.

More than 2,000 Utah companies exported goods last year to nearly 200 countries. Utah’s largest export markets are in the U.K., Western Europe, Asia, and Canada. Gold accounted for more than 40% of Utah’s 2006 exports, followed by transportation equipment, electronic equipment, minerals, and chemicals.

Housing One
Strong Utah economic growth and greater net in-migration of recent years has fueled a powerful rise in local home values. The latest data from the Office of Federal Housing Enterprise Oversight (OFHEO) noted that the average Utah home value rose 17.01% during the 12-month period ending March 31, 2007, ranking first in the nation. Neighbors Idaho, Montana, and Wyoming ranked 2nd to 4th, with increases ranging from 12.27% to 11.67%.

Provo-Orem (up 19.67%), Salt Lake City (up 19.12%), and Ogden-Clearfield (up 15.70%) all ranked in the top five of 375 communities measured nationwide. The average Logan home value rose 10.18%. St. George recorded a modest 4.65% home value rise, after much greater gains in 2004 and 2005.

The average American home value rose 4.25% during the same 12-month period, with dozens of markets (primarily on both coasts and in the Southwest) seeing prices decline. The average Utah home value rose 48.29% over the past five years, versus 53.53% across the U.S.

Utah View
The state’s economy is likely to slow modestly over the next 12-18 months, tied to extremely limited labor availability. Even so, the state should continue to rank with the best in the nation. Home price gains are likely to moderate. The overall Utah outlook remains upbeat.

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