"Construction seems to be accelerating in Utah while it is slowing down in other states," said Ken Simonson, chief economist for Associated General Contractors of America.

Simonson was one of a handful of economists and other economic professionals who on Thursday presented Utah economic forecasts for the rest of the year.

In Utah, residential builders aren't expected to have the banner year that they had in the state in 2006. But they are expected to have a good year because of Utah's strong job and population growth and continued low interest rates.

Nationally, demand for homes slid last month by the largest margin since 1989, the National Association of Realtors reported Thursday. There is growing worry that the downturn in the real estate market could hurt the U.S. economy.

In Utah, the commercial construction industry is even stronger than the state's residential industry, Simonson said. Developers are gearing up for years of high levels of activity, including work on the mixed use project City Creek Center in downtown Salt Lake City as well as large retail and office developments.

Simonson expects construction industry employment in Utah, unlike the rest of the country, to continue to climb.

"Utah has strong population growth, and over time, population growth tends to be the one thing that pushes up construction levels across the board," he said.

Wells Fargo & Co. economist Kelly Matthews said new home building activity in Utah should drop off a bit this year due to what he considers to be an affordability problem in the state.

He said wage gains in Utah - although substantial in recent years - have not kept pace with housing appreciation. That means a lot of Utah families - especially younger ones - are struggling to buy a home, even with the proliferation in recent years of adjustable rate mortgages and continued low interest rates.

But Utah's economic problems for the most part seem small compared with other parts of the country. The No. 1 reason for that is job growth.

U.S. Bank economist John Mitchell said among all states, Utah's rate of job creation is behind only Wyoming, Nevada and Arizona.

But Mitchell said Utah and other states will continue in 2007 and beyond to struggle with tight labor markets, which could become an economic problem.

lesley@sltrib.com

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* The Associated Press contributed to this story.