Wednesday, April 29, 2015

Mountainland Economic Update

Jim Robson, Regional Economist

Economic conditions in the Mountainland Service Area (Utah, Juab, Wasatch and Summit Counties) are very favorable with a vibrant year-over job growth of 4.5 percent, or 10,892 new jobs, from December 2013 to December 2014. Job growth and other indicators show that the economy is well into its fifth year of expansion. There has been job growth in most major industry sectors with particular strength among the wholesale and retail trade, construction, professional/scientific/technical services and health care industries. Unemployment in the region has subsided considerably from the recessionary peak of 7.6 percent at the end of 2009 to average 3.0 percent in the first quarter of 2015.

Utah, Summit, Wasatch and Juab Counties’ continuing job growth and favorable labor market conditions are expected to persist through 2015.  Based on the strength of employment growth in recent years, new job opportunities should increase between four to five percent and low unemployment will continue to characterize this area.

Utah County
* In December 2014, the number of payroll jobs in Utah County increased on average by 4.8 percent over December 2013, with 10,010 new positions. New employment growth has occurred in 16 of 19 major industrial sectors.

* The most new jobs were added by the trade industry with 1,984 additional jobs, a year-over increase of 6.2 percent. Two-thirds of these new positions were in direct marketing and electronic shopping firms.

* Construction industry jobs increased by 13.2 percent in the twelve months ending in December 2014 with 1,967 new positions. Residential housing construction activities provided 3 out every 4 new construction jobs. There were 4,946 dwelling units permited in 2014, a 52.6 percent increase.

* This new construction activity is reflected in related industries such as building material, garden supply, and furniture stores, and real estate services, each of which also experienced healthy job gains.

* In addition to the trade and construction jobs, five other private sector industries added between 531 and 1,514 new jobs over the 12 months ending in December 2014. Leading this list is professional, scientific, technical services which grew 9.7 percent, or 1,514 jobs— computer systems design being responsible for two-thirds of the new job opportunities. 

* Healthcare and social assistance contributed 981 new positions, increasing by 4.4 percent. Information (mostly publishing and telecommunications) grew by 8.6 percent or 844 positions. Food services contributed 572 new jobs. 

* Finally, with the tight labor market and low unemployment, the employment services industry added 531 positions increasing by 13.5 percent.

* The unemployment rate in Utah County has declined to a low level of just three percent in the first quarter of 2015 compared to 3.7 percent a year earlier. Initial claims for unemployment benefits through March 2015, while still above the levels seen prior to the recession, are at their lowest level in over six years.

* Utah County employment is expected to continue with strong job growth in 2015 at about 4.9 percent, adding on average between 9,000 to 11,000 new positions.

* Major continuing contributors to the robust Utah County economy will be construction, trade, professional/scientific/technical services and information services. 

Summit County
* From December 2013 to December 2014, Summit County added 525 new jobs for a year-over increase of 2 percent.  This end-of-year growth rate is lower than the more robust job growth of 4.1 percent achieved earlier in the year.

* Overall Summit’s labor market continued to exhibit balanced expansion in the fourth quarter of 2014 with most major industries producing new jobs.

* Construction contributed 262 new jobs with growth of 21.4 percent. Other significant contributors to employment increases were headquarters offices with 164 jobs, professional/scientific/technical services with 102 jobs, wholesale and retail trade with 99 jobs, healthcare/social services with 81 jobs, and finance/insurance with 75 jobs.

* The only major industry group with significant job reductions in December 2014 compared to December 2013 was leisure and hospitality. Within this industry group accommodations shed 387 positions and skiing facilities dropped by 145 compared to a year earlier as the warm and dry weather reduced winter recreation.

* For the fourth quarter of 2014 there was a net increase of 3.6 percent in firms and worksites within Summit County. This increase of 89 units brought the total count of firms and worksites to 2,594.

* The jobless rate in Summit topped out at 7.6 percent in summer of 2010 as a result of the recession. It has since receded to a favorable rate of 3.1 percent where it remains through the first quarter of 2015. On a seasonally-adjusted basis, there are currently about 700 unemployed Summit County residents for any given month. Initial claims for unemployment benefits are at six-year lows.

* Summit’s actual job growth of around 981 on average in 2014 is well above the 713 experienced in 2013. Employment gains among the majority of industry sectors will continue in 2015. Overall job growth in 2015 should be somewhat less than last year adding from 650 to 800 net new jobs or around three percent.

Wasatch County
* Employment growth in Wasatch County from December 2013 to December 2014 was a solid 4.3 percent with new jobs added in 13 of 19 industry sectors. The largest industry employment increases in Wasatch County occurred in professional/scientific/technical services with 98 new jobs, up by 35.3 percent. But that increase was partially offset by a loss of 46 jobs in administrative support/waste management services. Construction employment increased by 84 positions. Health care and social assistance services contributed 64 additional jobs.

* For the year ending in the fourth quarter of 2014 there was a net increase of 3.9 percent in firms and worksites within Wasatch County. This increase of 35 units brought the total count of firms and worksites to 940.

* The Wasatch County unemployment rate was estimated at 3.2 percent in the first quarter of 2015. During the recession, unemployment peaked in Wasatch at 8.8 percent in November 2009.

* In 2013, jobs grew by 7.6 percent and job growth was 7.1 percent in 2014. Wasatch County is expected to maintain a favorable labor market through 2015, though the rapid growth of the past two years will likely moderate to a still healthy increase of around 4.3 percent.

Juab County
* In the year ending December 2014, Juab County had a total of 3,334 nonfarm payroll jobs, 52 more than in December 2013.

* Industry sectors with significant job reductions were: manufacturing (-25), professional/scientific/technical (-21), mining (-14) and arts/entertainment/recreation (-13).

* Significant new positions were added by healthcare/social services (+44), construction (+36), food services (+34), and services to buildings/dwellings (+18).

* For the fourth quarter of 2014 there was a net decrease of 0.7 percent in firms and worksites within Juab County. This reduction of two units brought the total count of firms and worksites to 276.

* In March 2015, the unemployment rate in Juab County was estimated to be 3.6 percent, down from 4.3 percent in March 2014. An estimated 179 workers were unemployed in March compared to 205 a year earlier.

* Average annual jobs fell in 2014 by one percent or 34 positions less than in 2013. For 2015 the employment outlook brightens with expected growth of around 3.1 percent or an additional 100 net new positions.