Quantcast
Get breaking news alerts via email

Click here to manage your alerts
(Rick Egan | The Salt Lake Tribune) Seniors eat lunch at the Liberty Senior Center in Salt Lake City, Wednesday, April 2, 2014.
Economist forecasts growth, if slowed, for Utah
Economy » Retiring Baby Boomers may mitigate improvements, but state still on the uptick.
First Published Apr 02 2014 12:23 pm • Last Updated Apr 02 2014 04:38 pm

From where a seasoned economist sees it, Utah could have a good year in store.

John Mitchell, former chief economist at U.S. Bank and Boise State University economics professor, outlined his mixed but mostly upbeat outlook at a regional outlook conference hosted by Bank of Utah Wednesday morning. Utah has low unemployment, an attractive housing market and harder-to-quantify geographic qualities that promote venture capital. But while 2014 looks to be a year of growth for the Beehive State — an aging population might mitigate the speed.

Join the Discussion
Post a Comment

The so-called Baby Boomers are retiring and labor force participation is slowing down nationwide, Mitchell pointed out. The retirements potentially prevent Utah from reaching a "strong" economic growth, keeping the state at "moderate," as it rebounds from The Great Recession, according to the Utah Department of Workforce Services.

"It’s one of the things you worry about all the time," Mitchell said. Some of the participation will come back, but the situation casts doubt on how fast the economy can grow in the future. "And that’s the big issue. When we have a system that relies on transfer of payments from the working population to the [other population] — with the working population, size is very important."

The Utah Department of Workforce Services’ February employment situation report recognizes Mitchell’s concern — and adds some reassurance.

While a lot of states may theorize that the Baby Boomer retirements will cement labor force participation declines, Utah, "with its consistently high birth rates, is justified in expecting that rate to recover back to [pre-recession levels] with individuals aging into the labor force," according to the report. Every 1 percent increase in Utah’s labor force participation rate represents roughly 21,000 working-age adults entering the workforce, the report adds.

Military spending, considering Hill Air Force Base, is another question for Mitchell. Such spending makes up a lot of the declines in overall federal spending, in part because of the sequester and the wind-downs in Afghanistan in Iraq.

"You look at the data from Ogden, you’ve got declines in government employment … the military stuff is going down," he said. But on the other hand, Mitchell foresees the pressure out there to cut back possibly diminishing with the recent unrest around the Ukraine.

Otherwise, the job market looks good for Utah. Mitchell expects to see the state’s market grow 2.5 percent this year and about 3 percent next.

Unemployment, as of February, was at 3.9 percent, well below the national average of 6.7 percent, according to state statistics.


story continues below
story continues below

The Wasatch Front in particular is well positioned for a healthy economy. Mitchell, relating what he had read in Enrico Moretti’s book "The New Geography of Jobs," touched on the concept of "hubs" of rapid growth across the country. Such hubs of creativity and innovation are often associated with universities — of which the Wasatch Front has a few — that produces a skilled and diverse labor force. It also helps when geography allows for close proximity among venture capitalists; they like to be able to "walk down a hall or drive down the street to see what’s going on," Mitchell said.

"Utah’s one of the stronger states, one of the 15 states that have regained pre-Recession levels of employment," Mitchell said. "You’ve got rapid growth, you’ve got a broad mix of activity."

Mitchell’s presentation comes the day before the governor’s annual Utah Economic Summit.

mmcfall@sltrib.com

Twitter: @mikeypanda



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.