Record year for Utah
Job growth, employment, housing values are cited
By Dave Anderton
Deseret Morning News
Record job growth, record low unemployment and record housing values helped push Utah to a record performance in 2006.
And a great economy, Gov. Jon Huntsman Jr. said Thursday, means the state can invest record tax revenues into education and infrastructure.
Income tax collections grew 18.3 percent in fiscal year 2006, according to the 2007 Economic Report to the Governor, presented Thursday. The state ended the year with a budget surplus of $308.4 million after distributions to various funds.
"The revenue coming into the state is nearly twice the highest rate we've seen in the last 25 years," said Robert Spendlove, chief economist to the governor. "Pretty much all of our indicators are at record levels — exports, defense spending, they are all at record levels."
At 5.2 percent, Utah's job growth rate was the second highest in the nation. The state's unemployment rate of 3.3 percent was the second lowest in the country. And the value of new residential and non-residential construction reached an all-time high of $7.6 billion in 2006.
Spendlove said his counterpart in Michigan recently told him that he would gladly trade Michigan's problems for Utah's challenges.
"Michigan is seeing employment losses. It's seeing population losses," Spendlove said. "Its auto sector is in free-fall. The East and the Midwest are losing manufacturing jobs. And while some of those jobs are going overseas, a lot of those jobs are coming to Utah."
Utah's high fertility rate is partially responsible for the state's growing young work force. The fertility rate — which represents the average number of children expected to be born to a woman during her lifetime — stands at about 2.5 children for Utah women and 2 children for the U.S. average.
Utah created nearly 60,000 jobs in 2006, outpacing the year's 52,368 births. Net migration totaled nearly 29,000 people.
On the tourism side, Utah captured about 7 percent of the national market's skier visits. Utah reported a total of 4.1 million skier days during the 2005-2006 winter season.
"It was a record in 2006, and we are absolutely delighted with what it's doing to the repeat customers," said Leigh von der Esch, director of the state's Office of Tourism. "If you looked at any of the numbers over the holiday season this year, they are up again."
The report noted that the aging of baby boomers resulted in an increased proportion of older skiers, from 7 percent in the 1999-2000 season to 12 percent in the 2005-2006 season.
The so-called "echo boomer" group of 25- to 34-year-olds also showed an increase in the overall makeup of Utah's skiers.
The median age for all skiers in Utah is 34. Out-of-state visitors to Utah had a median age of 40.
Utah's construction industry ended 2006 with roughly 27,000 residential building permits handed out, according to preliminary figures in the report, a 5 percent drop from 28,285 permits in 2005.
James Wood, director of the University of Utah's Bureau of Economic and Business Research, said when the final numbers come out next month, he anticipates a 7 percent to 8 percent decline in 2006 residential permits compared to 2005.
Wood added that residential permits in 2007 likely will fall another 10 percent.
"We're a bit vulnerable there," said Wood, referring to the fact that one in four new jobs created in Utah are found in the construction industry. "It does cause some concern once things slow down. If they retreat orderly, it won't destabilize things."
Wood said that while non-residential construction, such as for office and industrial buildings, was showing an upswing, it would not be enough to make up for a substantial drop in residential building.
"Residential is much more labor-intensive, plus it's much larger," Wood said. "When residential construction starts going down, more jobs are lost."
The bright side for Utah homeowners in 2006 was skyrocketing housing values, which climbed on average 17.4 percent in the third quarter of 2006, the second-highest appreciation rate in the nation, according to a report by the U.S. Office of Federal Housing Enterprise Oversight. Fourth quarter rankings will be released in March.
Other highlights in the governor's report:
• Defense-related spending in fiscal year 2005, the most recent year for which data are available, increased 12.8 percent to $3.7 billion.
• Utah exports increased 12.9 percent during 2006 from $6.1 billion to $6.8 billion. Shipments of gold accounted for roughly 42 percent of the total.
• At 2.4 percent, Utah's population growth rate was the sixth fastest in the nation. Utah's population in 2006 was estimated at 2.6 million people.
• At $54,813, Utah's median household income ranked 10th highest in the nation.
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Record year for Utah!!!!!!!!!!!1
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