Local economists finally have a Gross State Product figure to add to their arsenal of data used in forecasting the state's economic future.
The figures, which show Utah's economy growing from $10.20 billion in 1963 to $21.18 billion in 1986, were produced by the U.S. Department of Commerce and released locally this month by the University of Utah's Bureau of Economic and Business Research.While some economists believe federal funds could better be used to improve reliability of existing data, others say the forthcoming GSP figures will provide a more complete measure of the state's productivity.
"This will be a useful new piece of data," said Brad Barber, state director of data resources. "It gives us a more complete picture of growth," than just using personal income and employment figures.
The GSP figures give a total dollar value of goods and services produced in the state along with a breakdown on how each industry is contributing to the state's economy.
Barber explained that his office has not finished its analysis of the GSP data, but when it does it will be able to better forecast state tax revenues. "State revenues is a direct function of Gross State Product (because) as the economy grows so does the state's revenue base."
The Department of Commerce ran GSP figures on all states, allowing for comparisons on a regional and national basis.
"It can give us a better perspective on how Utah is doing compared to other states," said Jeff Thredgold, vice president and economist for Key Bank of Utah.
Thredgold said he monitors the economies of other western states where Key Bank operates and the GSP figures will help him make those comparisons.
But, while the GSP provides economists with previously unavailable data to chart Utah's booms and busts, the production figures do have their shortfalls.
"It isn't precise. There is lots of convention and it doesn't account for all the work done (in the state) and the value of it," said Boyd L. Fjeldsted, senior research economist at the U's BEBR.
In computing GSP, only the market value of final goods and services, and not those furnished by from one business to another, is considered. The figure is gross in the sense that it includes the capital consumed in the process of production, Fjeldsted said.
Thredgold added that the first set of figures recently released, which only goes to the end of 1985, don't tell local economists anything they didn't know already about Utah's economy.
In charting the total product figure since 1963, Utah's economy was flat when compared to the nation and the Mountain West region. It wasn't until 1968 that some significant growth started to take place.
Frank Hackman, BEBR associate director, said development of Utah's transportation sector in the late 1960s broke down barriers that kept the state from exporting its goods, contributing to reduced transportation costs and increasing incomes and spending.
Then the energy boom set in the early 1970s. Property values soared, wealth increased and Utah's economy started on a step ascent and started to outpace the national economy from 1979 to 1986.
The recently released figures don't include the 1986 drop in oil prices and the subsequent slump in Utah's economy. Hackman said the state experienced a similar downturn in 1981, but it didn't get the attention of the recent slump because property values and wealth were still rising.
"Now those who bought a house in 1982 have practically no equity," he said.
On an industry-by-industry basis, the figures don't show anything new. When adjusted for inflation manufacturing contribution to GSP has increased from 17.85 percent in 1963 to 19.66 percent in 1986, the largest share of any industry.
Hackman attributes this to growth in the state's aerospace business, particularly the local operations of Hercules Aerospace and Morton Thiokol.
Transportation's share has also grown in the last 23 years from a 7.65 percent share of GSP to 11.97 percent, because of development of Utah's transportation infrastructure.
The sector showing the largest growth since 1963 is services - from 9.26 percent to 13.37 percent of GSP. Within the services industry, business services and health services have had the most significant growth.
Industries steadily declining since 1963 include mining, agriculture and construction.
Barber said industry breakdowns can help the state put together an economic development agenda. "If we can see which industries are contributing what, we can tell where we should put our emphasis."