The enhanced growth, which will put state revenues at $5 billion at the end of this fiscal year, is a result of growth in population, income and employment, said Andrea Wilko, an economist for the Legislature. Economists expect Utah's economy to continue to rank among the best in the nation through 2008.

Sen. Lyle Hillyard, Senate chairman of the Executive Appropriations Committee, said reasons for sustained growth are hard to call, but his gut feeling is that Utah's large graduating classes of well-trained but relatively low-paid workers is conducive to business growth.

Senate President John Valentine said he believes Utah has become more resilient in economic slides since its economy diversified in the past decade. "We have a broad range of industry, and not just high tech," he said.

Employment in the state should rise 4.5 percent by the end of 2007 and up another 3.3 for 2008, according to the state revenue update.

While construction has cooled nationwide, much of Utah's economic growth still is driven by construction - residential and commercial.

"Construction in the state has taken a breath," Valentine said, "but not slowed down."

Utah's tight labor market should continue to boost wages, but that could have a mixed effect on tax revenue, the state's economists say. Higher wages would increase consumer spending, but also cut into corporate profits.

Challenges to future growth will come from a potential slowdown in the housing sector and inflation.

Rep. Ralph Becker, D-Salt Lake City, said Utah's divergence from downward national trends is a relief, "But we are not immune. We need to be cautious about revenue projections because we know how quickly it can turn."