Utah's economy is going to get a lot worse in 2009.
Jobs are going to be harder to come by with unemployment rising from a projected 3.7 percent for 2008 to 5.5 percent this year.
Utah home prices will continue to fall and could decline another 8 percent in 2009, according to Juliette Tennert, the chief economist at the Governor's Office of Planning and Budget. Statewide, home prices declined 10.6 percent during the 12-month period ended Sept. 30, according to the Utah Board of Realtors.
Retail sales, the backbone of the state's economy, will contract in 2009 as the growth in Utahns' average annual pay slows from the 2.8 percent increase in 2008 to a much more anemic 1.6 percent rise.
Those dire predictions were included in the 2009 Economic Report to the Governor that was presented to Gov. Jon Huntsman Jr. on Friday by the state's Office of Planning and Budget at a meeting sponsored by the Salt Lake Chamber of Commerce.
Despite the dismal projections for the state, Tennert focused much of her remarks on what is positive about the state's economy prior to presenting the 2009 economic report to Huntsman.
"Utah has one of the most diverse economies in the nation," Tennert said, indicating that as a result, the recession should be less severe here than elsewhere in the nation and the state should rebound more quickly from the downturn.
Still, there are going to be tough times ahead for everyone.
Economist Mark Zandi of Moody's Economy.com, the keynote speaker at the event, pointed out the nation is seeing job losses across all industries and every occupation, from construction workers to lawyers. And not a single state has escaped the recession.
This year will be extremely difficult with the economy hitting bottom around mid-September. "The first half of the year is going to be very painful, while the second half is just going to be painful," Zandi said. "It will be 2011 before we start to feel much better."
On a positive note, the decline in home prices nationally has helped reestablish affordability that should help the housing market bottom out in the next few months -- except in Salt Lake City were prices are still too high.
"More price declines are coming," Zandi said, indicating home prices could continue to decline in Salt Lake City well into 2010. Home prices in Salt Lake County were down 9.6 percent from June 2007 through November 2008, according to the Salt Lake Board of Realtors.
Zandi is placing hope for a turnaround in the nation's economy on the massive stimulus package that is expected to be introduced by president-elect Barack Obama and considered by Congress.
"I wouldn't be surprised if we end up seeing a $1 trillion stimulus package," Zandi said.
He added, "We're going to get out of this [economic] mess, and we're going to get out of it by next year."
