"Utah is on the road to prosperity once again," a local economist says, as the past 12 months have shown job growth in basic industries outside of the service sector, giving the state's economy more balanced growth.
The Key Indicator, a 1988 fourth quarter forecast published by Key Bank of Utah, said Utah's economy has gained momentum through more balanced growth, an $80 million tax rebate and $14 million in bonuses paid at Geneva Steel of Utah and B.P. Minerals.Key Bank opposes three tax-cutting initiatives on the November election ballot but recognizes some benefit in having the issue surface.
"It (the debate over the tax initiatives) has focused state and local governments upon the need to restrain taxes and maximize the effectiveness and efficiency of public spending.
"Utah is on the road to prosperity once again," said Key Bank vice president and economist Jeff K. Thredgold.
He said the 17,200 net new jobs created in the past year is three times that of the previous 12- month period.
"This stronger economic performance also shows up in measures of retail sales, services and business equipment purchases and a sharply lower level of state government employment."
Thredgold said Utah's 4.8 percent unemployment rate is the lowest since 1979, the lowest in the Mountain West region and second lowest, next to Hawaii, of all the western states.
But, Thredgold notes, the decline in unemployment has been impacted by four years of migration out of Utah.
Employment in the service sector continues to lead the way in Utah's job growth, but other sectors have started to rebound. Service jobs, particularly in business services, increased 8,000 net jobs, while manufacturing added 4,500 positions. Mining grew by 500 new jobs, and transporation also saw an increase.
Employment weaknesses continued in the construction industry with a loss of 2,500 jobs, and federal defense installations had a loss of 800 jobs.
"The strength in Utah job creation has primarily emerged from new and small businesses, a trend that is also true of the national economy," Thredgold said.
Employment in Utah firms with more than 500 workers declined by 9,615 jobs during 1987, while firms with fewer than 100 employees created 9,064 jobs.
"Another reality of job creation is that approximately four new jobs in five are created by existing employers, rather than by new employers moving to Utah," Thredgold said.
"While public and private-sector attempts to attract new businesses to Utah are important, the major successes in job creation are tied to efforts of state and local officials promoting strong education, reasonable business costs and a viable infrastructure."
Other factors that will impact Utah's economic future are its growing work force and success in exporting to worldwide markets.
Nearly 80 percent of $495 million in Utah exports for 1986-87 fiscal year went to Pacific Rim countries, Thredgold said, noting "every opportunity to expand exports must be taken."
"Many states are putting increased export growth as a top priority - Utah must not be left behind."
Utah's population is expected to grow from 1.7 million to more than 2 million residents by the end of the century, Thredgold said. Population increases will take place primarily along the Wasatch Front and will benefit Utah's economic development efforts.
He said a nationwide labor shortage is taking place in many areas of the country, making Utah attractive to employers exploring expansion into other states.
"Utah's expected faster population growth should help alleviate employer concerns about labor availability in the future."
Thredgold had specific praise for B.P. Minerals' Kennecott Copper operation and Geneva Steel of Utah in pacing growth in Utah's "basic industries."
He said the growth in mining, aerospace and defense related industries bring in outside dollars that are circulated throughout the local economy.
"On average, every job in basic industry sustains another 1.5 jobs. Efforts to promote and expand Utah's basic industries are perhaps the most important of all economic development efforts."