Utah’s economy is booming; there’s little doubt. But, there’s a small but growing fear that we may be at the peak of that expansion.
Juliette Tennert, Cheif Economist with the Kem C. Gardner Policy Institute, says Utah’s economy has been expanding for 8 1/2 years, which is a remarkable run, but there is reason to believe that may be ending.
“Are we starting to see some deceleration? Probably, but we are still way ahead of the rest of the nation,” she said.
In fact, according to figures presented at the Salt Lake Chamber’s Economic Outlook & Public Policy Summit shows Utah’s economy is still a full two years ahead of the rest of the country regarding economic expansion.
“Utah recovered employment following the recession in 2012, while the nation did not recover those jobs that were lost in the recession until 2014,” says Tennert.
Additionally, Utah is currently experiencing the most substantial job growth in the nation at 3.1% employment expansion, which is double the national rate.
But there are some issues that could drag down that economic growth, though. Cheif among them is Utah’s poor air quality.
“If Utah is looking to attract talented labor and keep labor from leaving, then air quality is going to be a problem,” said Tennert. “At some point, when we’re working with the next Adobe, this air quality has got to pop as an issue that could lead to an incredible company not coming to Utah or locating outside the state.”
However, Utah’s air quality has improved, but the public impression of it hasn’t.
“If you just look at the data, our population has increased, and air pollution has gone down,” says Rep. Robert Spendlove (R-Sandy). “But we still have a week in December where you can’t see across the street.”
Spendlove related a story about an employee he hired from out of state who was aghast at one of Utah’s famous inversions.
“I hired someone from Kansas. He moved to Utah. One week we had an inversion, and I was convinced he was going to quit and leave the state.”
Another issue that is worrisome is Utah’s brain drain. Businesses are competing to attract and keep skilled labor. 43% of the people who move into Utah have a bachelor’s degree or higher, but nearly half of those who leave the state have that level of education.
Utah is basically at full employment right now, which means the state is seeing a healthy level of wage growth. That is expected to continue into 2018.
Another big boost for Utah’s economy has been the Trump administration’s economic policies over the past year. Whether the GOP tax overhaul that passed Congress in the final days of 2017 could have an accelerating effect on Utah’s economy in the next year remains to be seen.
Spendlove is bullish on tax reform, saying what we’ve seen so far from the Trump administration gives him reason to be optimistic.
“The DOW opened above 26,000 for the first time today, and the new administration can take a lot of credit for that change. Everyone assumed that the same economic policies would be in place following the 2016 election because we all thought Hillary Clinton would win,” he said. “The Trump administration has focused on growing the economy. Consumer confidence has jumped.”
While there are high hopes for the GOP tax plan’s effect on Utah’s economy, Tennert says economists still don’t know how much of an impact it will have. However, she does think there will be a boost in 2018.
“Most Utahns and most businesses will get some tax cut, so I think there will be a boost in the economy,” says Tennert. “The magnitude remains to be seen. We are basically at the peak level for our economy right now.”
