Utah economy improving, not job situation
September 25, 2009
The latest reports on the Utah economy appear to be doublespeak: things are looking up, but job losses will continue.
James Robson, regional economist for the Utah Department of Workforce Services, said Thursday it’s because businesses will see improvement but won’t necessarily hire new people this year.
Many companies have cut hours for vital employees instead of laying them off. As the economy improves, those people will get their 40 hours a week or overtime back. It will take much longer for new people to be needed, he said.
"The unemployment rate and the job situation are some of the last things to improve," Robson explained.
In his monthly report, "Utah’s Economy" for Commerce CRG, James Wood at the University of Utah’s Bureau of Economic and Business Research said Utah is only a few months behind the nation’s recovery.
Historically, Utah’s numbers usually pick up when the country’s does. The state has taken a few months longer to "hit bottom" because of how poorly the construction industry is doing, but we are almost there, he explains in the report.
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"Job losses in Utah are still accelerating and not expected to begin deceleration until late this year," it reads.
The value of new office buildings is down 51 percent, and retail structures are down 56 percent. Industrial building would be down 75 percent if not for a project in South Jordan.
Robson said the summer has averaged about 26 unemployment-insurance claims per week. This time last year the average was only about 15.
But since many of the lost jobs in Summit County were held by people who lived in Wasatch, Salt Lake and Morgan counties, this county’s unemployment numbers aren’t that bad and have been picking up, he pointed out.
From July 2008 through June 2009, the county’s unemployment rate rose slowly but steadily, peaking at six percent. But since June, the number has continued to come down.
"Claims are still above what you’d see in a growing economy, but not too bad," Robson said.
Kelly Davis, director of research for SnowSports Industries America (SIA), said some sectors of retail were actually up last winter, and there’s every reason to expect people to ski this winter.
While buyers did forego big purchases last winter like new alpine skis, they did make selective purchases like high-end adult boots an area that actually saw an increase in sales.
They also bought things like goggles, helmets and walking boots, giving many accessory providers an up year. This is proof of what the industry has said all along: habits may change in a slow economy, but skiers still ski, Davis said.
The 2007-2008 season also saw about 1 million more snowboarders nationwide, Davis said. That’s because members of Generation X are continuing to snowboard as they age, and are getting their kids into it as well.
That’s also been a good generation for skiing. The average skier nationwide is a college graduate in the 30s who enjoys a household-income with six figures. While the credit crash last September has likely hurt that demographic, the 2008-2009 season was still consistent with the five-year average, she said.
Ralf Garrison, director of the Mountain Travel Research Program, had less hopeful news in his monthly report about the nightly-rental industry. According to the communities feeding numbers to him, August was down 21 percent from the previous year.
But it’s an apples to oranges comparison, he emphasized in the report. Starting in September, month-to-month comparisons will stop creating gloom and will begin to provide useful information. The report also said that advanced reservations for winter in August were decent.
Paul Kennard, executive director of Heber’s Wasatch Economic Development, said Thursday summer is his valley’s strongest season and Labor Day Weekend numbers were great at the sheep dog championship, and about 100,000 people attended Swiss Days in Midway despite rain. Lodging properties told him they were down from last year, but summer was "decent."
The Outdoor Foundation’s 2009 Outdoor Recreation Report also came out this month and said that Americans are continuing to turn to nature for recreation as they cinch their belts. Backpacking, mountain biking and trail running all showed double-digit increases in participation.