Utah ranks second among the next economic 'boom states'
Washington • Utah's economy is growing and a new report comparing states throughout the nation says it is ready to explode.
Citing the state's burgeoning tech sector and its spike in exports, combined with a lenient regulatory structure and low cost of living, the U.S. Chamber of Commerce ranked Utah second in a list of "the next boom states."
And the chamber, a conservative organization representing business interests, let Utah Gov. Gary Herbert run a victory lap Wednesday during its Jobs Summit in Washington, D.C.
Herbert joined three other governors from states with above-average growth for a 90-minute discussion of the roles they can play in setting the business climate.
The governors credited their success to a relentless recruiting campaign and a coordinated effort to make their states more attractive to CEOs whether by lowering tax rates or boosting the educational attainment of its residents.
"It is an attitude. We are saying to the marketplace that we value the entrepreneur and the businessperson," Herbert, a Republican, told the crowd that included business leaders. "We're going to make sure we have government that gets off your backs and out of your wallets."
Delaware Gov. Jack Markell, a Democrat, said his first question for any business executive is: "What can I do to facilitate your success?"
Nebraska Gov. Dave Heineman, a Republican, ranked job creation as his top priority and said the majority of his time is spent on economic development and education.
"I want every young person in my state to get the best education I can give them," he said. "Then I want to create jobs and keep them right there in Nebraska."
If that's the goal, Utah seems to have a lead on many states.
The chamber report, which relies largely on government statistics and independent economic analysis, found that states in the Intermountain West and the Great Plains are leading the nation in private-sector growth, mainly because of the energy surge and stability in agricultural markets.
In its economic outlook, Utah trailed only North Dakota, a state that has benefited disproportionately from oil drilling.
The No. 2 ranking should reassure Utahns that the Beehive State's economy is continuing to recover even as the rest of the country appears to be slowing down again. It should also send a signal to outsiders that numerous accolades heaped on Utah the past several years are deserved, Zions Bank economist Jeff Thredgold said.
"For people in the state, it verifies that Utah is a great place to live, and we are coming out of [the recession and sluggish recovery], and we are coming out of it faster than anybody else," said Thredgold, who looked at North Dakota as economically monochromatic.
"North Dakota is like South Dakota or Louisiana; it's all about energy," he added. "But Utah is like an Idaho or a Colorado: a great place to live, a great place to do business, a great place to recreate, and that is a big difference" to outsiders who want to know about life here.
Utah landed in the top 10 in 19 individual economic categories, including a second place rating in export growth and the business birthrate.
"We see a lot of rankings," Salt Lake Chamber economist Natalie Gochnour said, "but the conclusions of this report are consistent with what we've seen in the economic data."
The chamber's study notes that Herbert led an effort to reduce the number of government regulations and cut the cost of unemployment insurance for businesses. It also highlighted the growth in the financial-services sector, which is led by the recent expansion in Goldman Sachs' Utah operations.
Herbert, whose state has a 6 percent unemployment rate, said he was proud of the high marks, but not satisfied, emphasizing that economic expansion remains his top goal.
"I won't rest until anyone who wants a job has a job," he said, noting that while the state has seen a rise in the tech, energy and financial sectors, the leisure and hospitality area has been stagnant.
During the past 12 months, Utah employers have created 25,200 jobs, according to the state Department of Workforce Services. While the year-over-year growth rate slipped to 2.1 percent in April from a post-recession high of 3 percent in December, the pace of job creation is almost double that of the nation.
"If you had to pick a number, I would say Utah's economy right now is probably twice that of Idaho and Colorado," Thredgold said, "and [compared to] the entire country, it's three times stronger."
Herbert will speak Thursday at an event organized by General Electric to foster relationships with Chinese business leaders and then he will launch the D.C. chapter of his "Utah Ambassadors" program, which is an effort to get people with Beehive State ties to help recruit business expansion.
Herbert is up for re-election this fall, with his main opposition coming from Democrat Peter Cooke.
The Cooke campaign acknowledged the positive economic numbers but accused Herbert of neglecting important areas in his quest to reduce government intrusion namely education funding and air quality.
"We have had a great surge, but I'm very concerned for the future," said Cooke, warning that the economic numbers may be inflated by big construction projects, such as the new City Creek Center mall in downtown Salt Lake City and the coming data center for the National Security Agency near Camp Williams.
The four governors, often criticizing the federal government for spending too much and instituting onerous regulations, said Tuesday what has worked for their states can do the same for the nation.
Wisconsin Republican Gov. Scott Walker, who last week survived a recall election spurred in part by his fight to restrict state employee benefits negotiated by unions, said his struggle has solidified his governance outlook.
"We need more growth," he said, "and more frugality."
Paul Beebe contributed to this report.
See more about comments here.