Salt Lake Economy Looks Good in the Short Term
Despite the downturn in real estate, projections for Utah’s economy are still quite positive. A report released this morning shows Utah’s economic future is till quite bright.
In September, Utah led the nation in job creation -
Pointing to September’s job growth figures, Matthews said Utah was the top state with a 4.4 percent increase.
“We were way above everyone in the country,” he said, noting that Wyoming and Montana came in second and third with 3.3 percent increases while Arizona was fourth with a 2.6 percent jump in the number of new jobs created.
Higher fuel prices and the real estate slow down are expected to have little effect on Utah’s economy during the projected period.
Even the prospect that the price of gasoline might remain
above $3 a gallon in Utah and that the pace of home construction will continue to slacken, doesn’t significantly diminish Utah’s economic outlook for next year, he said.
“If you look at total construction employment [commercial and residential] in September we were still nearly 12 percent ahead of a year ago,” Matthews said. “Total construction employment [in Utah] should remain pretty solid.”
I had a discussion with a real estate investor and foreclosure expert the other day who pointed out the problems we’re having in the real estate sector are quite unique. He reiterated that real estate is local, but the lending problems are national. Unless drastic changes are made in the lending marketplace, fringe buyers that were able to get loans in the recent past will be excluded in the future. House prices are sticky on the way down meaning the downward trend takes much longer to play out than the upswing.
Utah’s promising economic future assures house prices will take longer to go down…if at all. It’s important to note that Utah’s strong economy can’t outweigh the lending policy decisions created by the Federal Reserve Board and Congress.
Mark Knold, senior economist at the Utah Department of Workforce Services, said while there may be subtle changes in Utah’s economy during the first half of 2008, overall the state will experience strong growth, a tight labor market and low unemployment.
As other state’s economies slow down, Utah should draw a strong in migration and that will help support home prices though sales activity is expected to drop sharply.