Park City jobs comeback projected to be solid, but not a complete V-shaped recovery
The unemployment rate in Summit County jumped to a stunning 20.3% in April, the highest in decades.
The explanation was immediately apparent. The spread of the novel coronavirus forced an early end to the ski season, in mid-March rather than in April, sending ripples through a large swath of the Park City-area economy. Layoffs quickly mounted as health officials put restrictions on everyday activities. People who worked at the mountain resorts, retailers, restaurants and in the lodging industry were suddenly let go, leading large numbers of them to file unemployment claims.
“The whole package was told to take a hiatus,” said Mark Knold, the chief economist for the state Department of Workforce Services and a figure who has long tracked unemployment numbers in Utah.
In a typical year, the mountain resorts would stop running the lifts in April, but the rest of the economy largely remains open with only scattered short-term closures that are traditional at the end of the ski season. Knold, though, said important sectors of the Park City economy were closed alongside the mountain resorts, leading to the increase to the 20.3% unemployment rate from 2.9% in March and 2.6% in April of 2019.
“That doesn’t mean the hotels also close … or the restaurants shut down,” he said about a typical end of the ski season, adding, “Usually, it’s just the ski resorts themselves.”
The job losses were instant and dramatic in the Park City area, he said. Knold said the statewide employment reductions in crucial Park City industries were heavy in April. Employment across Utah in the arts, entertainment and recreation sectors crashed by 65% while restaurant employment fell 40%. Lodging employment was cut by 34%.
The industries critical to the Park City economy, and those that were especially hurt in April, account for approximately 12% of employment on a statewide basis. But those industries make up a much larger bloc — upward of 38% — of the jobs in Summit County, according to the Division of Workforce Services.
“Those are the hardest hit areas,” he said, explaining the importance of those industries to the Park City-area economy.
The statewide unemployment rate dropped to a preliminary 8.5% in May from an upwardly revised 10.4% in April, the Department of Workforce Services reported on Friday. The May unemployment rates in Utah counties are scheduled to be published on Monday. It seems almost certain there will be job gains from the 20.3% unemployment tallied in April in Summit County. May appeared to be an economically weak month in Park City as well, but there was evidence of at least a fledgling beginning of a comeback as some places reopened after the March and April shutdowns. Although the unemployment rate in the resort-driven economy of Summit County does not necessarily track the statewide rate on a month-by-month basis, the numbers across Utah seen in the report on Friday could signal there were geographically broad gains.
Knold forecasts the May unemployment rate in Summit County will drop from April but remain elevated. He projects the rate could fall to the range of 15% in May with a further reduction in June. He predicted the 20.3% in April will be the bottom unless there is a significant reemergence of the coronavirus. He described the April unemployment report as the “high point” in the losses.
“The numbers aren’t going to get worse in May,” he said.
Knold predicted the monthly reports will continue to improve in 2020, starting with gains in May and June. He said the improvements, though, will not result in a so-called V-shaped recovery, meaning the creation of jobs essentially occurs as quickly as the losses. He described the jobs recovery in the Park City area could be solid but “not a complete V.”
“Is that ‘V’ going to go all the way back to the starting point. … Probably not,” he said.
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Park City officials are expected to present information about upcoming work on the Treasure acreage designed to guard against a wildfire, as well as a series of other City Hall projects and programs, at an open house that is scheduled next week.