John Mitchell began his discourse on the local and national economy with a poem. Fortunately for Utahns, his prose had a happy ending.
Mitchell, western region economist for U.S. Bancorp, said Thursday morning during a speech in Salt Lake City that although economic times have been tough, there is a "glimmer of rebound" on the horizon.
Though the rate of job growth has slowed, Mitchell said Utah continues to outpace the national figures; though consumer confidence has taken a hit, particularly after Sept. 11, low interest rates have steadied spending in several major sectors (housing and automobile purchases, for example); and though the first quarter of 2002 likely will continue the year's decline, the upcoming Olympic Winter Games may help Utah bridge the gap between recession and recovery.
"Here we are in the middle of a national recession, and you are throwing this major event," Mitchell said. "You're bringing in all this spending during a time of weakness. Not too bad a deal."
By the time the national economy begins to strengthen, which Mitchell anticipated would take place toward the end of 2002, the short-term effect of the Games should be dissipating and Utah can begin the long-term recovery along with the rest of the country.
But this economic cycle will be different from the 32 others the nation has experienced since 1854, he said, in large part due to the attacks in September. There will be more spending on defense and security, by the government, businesses and individuals, Mitchell said. Housing, which has benefited even during the recession from low interest rates, likely will continue its steady course rather than springing back as in other cycles. And the automobile industry, still swooning from a boom in sales following its post-Sept. 11 no-interest financing campaign, may experience some weakness in 2002.
Utah will share in that fate, though not to the same degree, Mitchell said.
"Utah has been outperforming the U.S. economy for a long time," he said. "You're not immune from the cycle. But the long-term outlook remains good."
Duane Shaw, president of Academy Mortgage Group, was not so optimistic.
"I think the Utah economy is pretty weak right now," Shaw said. "I'm not really that optimistic. I think it will be 12 to 18 months before Utah turns around. I think the U.S. economy will turn around faster."
Outmigration and fiscal belt-tightening likely will affect Utah more than other states, Shaw said. And though the economy might see a short-term boom from the Olympics, Shaw predicted not everyone will share in the wealth.
"Only a few industries will benefit from it," he said. "Most will not. I think there will be a slowdown in the next six weeks, because people will be watching the Olympics, either at home on TV or going to the events. Even people who wouldn't normally go to these events will go this year, because it's here, and it's the Olympics."