SALT LAKE CITY — Before the coronavirus outbreak, the Beehive State boasted one of the best economies in the nation.
The strong foundation for growing businesses produced record low unemployment and robust population expansion, and put two Utah cities among the top ranking metropolitan areas poised to recover in the post-COVID-19 era, according to a report from analysts at Moody’s Analytics.
“Coming into this recession, Salt Lake City and Utah in general was — if not the best positioned state and metro area — at the top of most regional economists’ list to begin with because you have a vibrant tech hub, you have a young, educated workforce and relatively low costs compared to Silicon Valley,” according to Moody’s senior regional economist and report author Adam Kamins. “All of that would have been an advantage regardless. But now as you get this kind of movement (and) potential exodus out of places like New York and San Francisco, where people are going to end up will be in metro areas like Salt Lake.”
Researchers compiled data on the top 100 metro areas in the United States to determine which locales would likely be able to rebound once cities around the country begin to reopen businesses and resume more normal economic activity.
Joining the two Utah metros in the top 10 rankings of the study are Boise, Idaho; Denver; Durham, North Carolina; Madison, Wisconsin; Raleigh, North Carolina; San Jose, California; Tucson, Arizona; and Washington, D.C.
Kamins talked of keys to recovery.
“One would be by having a highly educated, highly skilled workforce — that’s nothing new,” he said. “But that’s been really the key to growth, especially in tech over the last decade or two. And that’s been what’s really differentiated the strong performance from the weaker performers.
“What we saw at the end of the last expansion with this movement into places like Salt Lake City and Denver, and even in the Midwest like Columbus, Ohio — are lower cost alternatives to more expensive hubs, but (also) have the kind of workforce you need to grow and thrive.”
He said coming out of this pandemic turmoil, prospective employees will be looking to settle in places with less danger health-wise in the event of a COVID-19 repeat. That would mean finding lower population density metro areas with strong economic potential, Kamins said.
“People are not going to want to live in areas that they deem risky. But even if we do get a vaccine, people are going to have long memories of what they just went through and the generation that graduates from college in three, four or five years from now may think twice about moving to New York the way that millennials might have a decade ago,” he said. “That makes places like Salt Lake City and Provo really attractive alternatives for those types of individuals and for the firms that would potentially follow them.”
He noted that one concern about potential recovery from the pandemic is the conflict civic leaders are having in determining the best course of action to take to control the outbreak while managing a fragile economy.
“We’ve been presented with a false choice between reopening the economy and (threatening) public health. In reality, the only way to truly emerge from this recession is through a treatment, a vaccine, a huge ramp up in testing or some other measure to get the virus under control,” he said. “What worries me at the moment is the possibility of a double-dip that either the states are reopening prematurely or that potentially this could happen naturally.”
The unique nature of this situation makes dealing with this economic circumstance unlike anything that has happened before, he said.
“This is truly what we economists call a ‘black swan’ event that could not have been predicted six months ago. ... It is a very kind of specific and idiosyncratic event that until the public health emergency has been resolved, there’s no way to truly get out of it,” Kamins said. “There’s a way to kind of tentatively move forward and to reopen cautiously and not necessarily be stuck in the high teens in unemployment for a year or two. But I think we’ll stagnate without those sorts of additional measures without getting the public health crisis under control.”