February 24, 2008Once Immune, Utah Is Feeling Economic DipBy KIRK JOHNSONSALT LAKE CITY — In the economic boom that thundered through Utah over the lastfew years, many people saw a kind of perfect chemistry at work.What demographers call Utah’s special story — its population is the youngest inthe nation by far and one of the fastest growing, mainly from large Mormonfamilies — was paying off, melding with a surging engine of growth in Utah’sbackyard and throughout the world.Between November 2006 and November 2007, Utah created more jobs than Pennsylvania,a state five times the population. Construction spiked at the same time as a giantwave of 20-somethings — another wrinkle unique to Utah, a baby boom echo longafter the rest of the country’s — entered the worlds of work, housing and family.But economists, employers and residents now say the very forces that made Utahroar — in the types of jobs that grew, especially construction and manufacturing —also pulled the state more firmly into the national and global economic web. Andsome of the distinctive traits that looked like strengths, like the low numbers ofretirees, now seem like chinks in the armor. Retirees, who have flocked to placeslike Montana and Idaho, are likely to have interest and investment income to spendno matter what happens, while wage earners, who dominate Utah’s economy, couldsuffer in a downturn.Utah’s unexpectedly sharp knock is a reminder of how global and local areintertwined and how delicate the balance can be.“We’re no longer insulated,” said Pamela S. Perlich, a senior research economistat the University of Utah. “Utah still has a special story, but it got blurred bythe engine of economic growth.”Even as the rest of the nation’s economy began stumbling last year, Utah’simmunity seemed secure. The global shocks to housing, credit and the stock marketwould remain distant echoes, many economists said. The dismal picture of boarded-up, foreclosed houses that can be seen in places like Las Vegas or Riverside,Calif., would not happen here, business leaders said with a touch of smugness,because Utah, marching to its own fiscally prudent drummer, had not overbuilt.But in December, the number of single-family housing permits issued here fell 32percent, the steepest one-month decline since 1980, and sales of existing homesplummeted, off nearly 34 percent in the fourth quarter of last year — the sixthworst record in the nation, according to the National Association of Realtors.Job growth projections for 2008 were recently cut by a third, in the state’s ownanalysis, to 2 percent from 3 percent or more only a month ago. New housing startsare expected to fall nearly 60 percent in Utah in 2008, a worse hit than Nevada orArizona, which have become national symbols of the housing mess, according to arecent national forecast by Moody’s Economy.com.Utah does not have the same magnitude of problems that other states are facing,and if history is a measure it will weather a recession better than many otherregions. Only twice since the early 1960s, even as the nation endured numerousrecessions, has Utah had fewer jobs at year’s end than it did the year before.People like Dawn Updyke and Rick Draper, who helped bring Utah to its new place,are feeling the effects.
Leave a Comment