2011 Advance GDP by Metropolitan Area Released

The U.S. Bureau of Economic Analysis recently released gross domestic product estimates for the nation’s 366 metropolitan areas. In 2011, metropolitan area growth registered an average of 1.6 percent—just slightly higher than the U.S. total (1.5 percent). However, the growth rate for metro areas dropped noticeably from the 2010 expansion of 3.1 percent.

Only 242 of the nation’s metropolitan areas experienced a 2011 gain in GDP. However, all of Utah’s metro area’s showed increases equal to or greater than the U.S. metro average. Both Ogden/Clearfield and Provo/Orem generated gains of greater than 5 percent. Lowest on the scale proved the Logan metro area with a gain of only 1.6 percent. For more information on the current release, click here.

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Utah Senate committee debates prison relocation

Utah lawmakers are considering a plan to relocate the state prison in southwest Salt Lake County.

Sen. Scott Jenkins introduced legislation that creates an authority to manage the relocation of the Utah State Prison and evaluate proposals from companies seeking to build a new prison or develop the old site.

The Utah State Prison occupies about 700 acres in Draper where tech companies such as eBay and Microsoft have opened offices.

Gov. Gary Herbert has called on lawmakers to fund the relocation so the corridor can develop as a technology hub. State officials have been weighing relocation for several years.

The Utah State Prison was built in 1951 and houses about 4,500 inmates. Before that, Utah's state prison was at what is now Sugar House Park.

The state also operates a prison in Gunnison, the Central Utah Correctional Facility.

The goal is to get the legislation passed quickly so the authority can get up and running by April 15, as required by the bill, Sen. Scott Jenkins said.

The authority would then seek proposals from companies and come back to the Legislature and governor with a viable option.

It's unlikely any proposal would be ready to come before the Legislature by the time next year's session concludes, but the governor could convene lawmakers in a special session to approve the plan.

Some of the possible sites that have been considered for the new prison are in northwest Utah _ specifically Box Elder County, Juab County and Tooele County. Cache Valley Daily

Local Insights and Utah Insights updated on the Web

The Fall 2012 issues of Local Insights has been updated on the web.

This edition focuses on the most recent recession and the long-term unemployed.

The statewide edition includes a feature article on Unemployment Insurance Outcomes in Utah.

To see more, click here.









To receive a copy, call 801-526-9785

Provo women earn some of the lowest salaries in the largest U.S. Metropolitan Areas

Women in Provo have some of the lowest average salaries in the country, according to a Forbes analysis of the 2010 American Community Survey by the U.S. Census Bureau. Provo women are making on average less than $37,000 a year, according to the report. Provo women are making on average less than $37,000 a year, according to the report. Deseret News

Note:
Since I am interested in women's labor force issues and don't usually look at this type of data below the statewide level, I took the opportunity to look at the actual Forbes article. Forbes  used 2010 American Community Survey data for "large" Metropolitan Statistical Areas (MSAs) and focused on females working year-round and full-time. Unfortunately for comparative purposes, Forbes doesn't tell us what they considered a large MSA.

With median female earnings for year-round, full-time workers of $31,400, the Provo/Orem MSA ranks 249 out of 374 MSAs nationwide. Incidentally, the "smaller" MSAs of Logan and St. George showed lower female median earnings ($27,100 and $26,700, respectively). Other large Utah MSAs appear higher in the rankings--Salt Lake ranks 154, while the Ogden/Clearfield MSA ranks in the 200 spot.

However, keep in mind that areas with low female earnings might also have low earnings for both genders. In other words, an MSA's low female earnings may be reflected in low male earnings as well. Cost of living, age of the labor force, industrial mix, etc. affects wages generally. . .not just for women. In my mind, the true question perhaps should be: How do men and women's earnings compare in Utah's most populous communities?

In 2010, U.S. median earnings for women working year-round, full-time measured 78.6 percent of the comparable male figure. (This wage gap has contracted decidedly in recent decades.) How do Utah's MSAs stack up? Honestly, not so great. The Ogden/Clearfield MSA shows a female/male wage ratio of 63 percent, the Provo/Orem MSA shows 65 percent ratio. Logan's ratio measures 70 percent, and St. George's figure is 71 percent. Even in Utah's best MSA performer--Salt Lake City--the female median wage measures only 74 percent of the male median wage. More than 70 percent of the nation's MSAs show female/male wage ratios better than Salt Lake City.

What's up? Why the low female-to-male wage rations in Utah? Undoubtedly many factors come into play. However, one major influence on the large difference in wages seems to come to the forefront. I call it the "education gap" and it is a primary factor behind Utah's larger-than-average wage gap. Statistically, there is a well-know relationship behind one's earnings and one's education. In general, the higher a person's level of education, the higher their earnings.

What's the education gap? By my reckoning, it is simply the percentage point difference between the share of the male population (over 25) with at least a Bachelor's degree and the share of the female population (over 25) with at least a Bachelor's degree. Nationally, there is a six-tenths of a point difference in the share of men and women with at least a Bachelor's degree (28.5 percent and 27.9 percent, respectively). In other words, in the U.S. there is currently very little difference between the share of men and women with a four-year degree or better.

The three MSAs with the largest male/female education gap in the nation? Number 1--Provo/Orem, Utah (11.3 percentage points). Neck and Neck for the number 2 spot--St. George, Utah (9.8 percentage points) and Ogden/Clearfield, UT (9.8 percentage points). Logan's performance is somewhat better--"only" a 4.2 point difference. The Salt Lake MSA managed the smallest Utah education gap--still large at 2.5 percentage points. Every single Utah MSA ranked among the 20 percent of MSAs with the largest education gaps.

Keep in mind that in 40 percent of the nation's Metropolitan Statistical Areas, a higher percentage of women have obtained a Bachelor's degree than have men. If Utah's women are falling far behind men in educational attainment, it should come as no surprise that they are falling far behind men in earnings.

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Utah hotel occupancy, rates up slightly

Utah occupancy and average daily room rate for hotels and motels were both up slightly in 2011. According to the Utah edition of the Rocky Mountain Lodging Report, the 2011 occupancy rate was 62.7 percent, up from 59.7 percent in 2010.

The average daily room rate for the year to date was $95.69, compared to $93.29 for 2010. Revenue per daily room rose as well, from $55.70 in 2010 compared to $60.04 for 2011. Salt Lake City recorded the best in 2011, with a 69.6 percent occupancy rate and average daily room rate of $93.65.

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Ogden occupancy was at 60.7 percent, Cedar City at 53 percent, St. George at 60.1 percent, Logan and Utah County at 58.1 percent, and other Utah cities and towns at 61.2 percent. Salt Lake Tribune

Think tank ranks Utah cities among those best for business

The Milken Institute, founded in 1991 and based in California, has released a new list of best performing cities for the year. Salt Lake City, Provo and Ogden ranked in the Top 25 among large metro cities, while Logan ranked No. 1 among small cities. Logan skyrocketed from its No. 19 ranking in last year's list.

The research looked at 179 small cities and 200 large metros. In the large-city category, Salt Lake was ranked No. 6, Provo was listed at No. 9, and Ogden took the 15th spot on the list. St. George, which falls in the small-city category, was ranked 124th. No other Utah cities made the list. Herald Journal

Most of Utah's Metropolitan Statistical Areas experience GDP growth in 2010

The U.S. Bureau of Economic Analysis just released annual Gross Domestic Product (GDP) estimates for Metropolitan Statistical Areas (MSAs) today. Remember that GDP represents the value of all goods and services produced in an area. Real (inflation-adjusted) U.S. GDP for metropolitan area increased an average 2.5 percent in 2010 after declining 2.5 percent in 2009. Growth proved widespread with real  GDP increasing in 304 of 366 (83 percent) metropolitan areas, led by national growth in durable-goods manufacturing, trade, and financial activities.

In Utah, growth also dominated the figures with only the St. George, UT MSA displaying an annual decline in real GDP (down 1.6 percent). In general, GDP growth in Utah's MSAs registered below average. The Logan UT, MSA showed the most rapid expansion (4.0 percent).

For more information about the 2010 GDP figures for MSAs, click here.

New Total Personal Income Estimates at the Metropolitan Statistical Level

The U.S. Bureau of Economic Analysis (BEA) has just released 2010 total personal income estimates for U.S. Metropolitan Statistical Areas (MSAs). According to BEA, personal income rose in 2010 in all but four of the nation’s 366 metropolitan statistical areas. Fortunately, none of Utah's five MSAs ranked among those with declining personal income. On the other hand, some MSAs performed far better than others. Overall, personal income in the U.S. increased 2.9 percent between 2009 and 2010. Here's a few highlights of the MSA stats:

Logan, UT-ID MSA--Personal income in this MSA totaled $3.4 billion in 2010, an increase of 4.1 percent from the previous year. This ranked this MSA 53rd in terms of growth--the highest of any Utah area. This area also showed the highest gains in net earnings--3.4 percent.

Ogden-Clearfield, UT MSA-- In 2010, personal income in this MSA reached $18.2 billion reflecting a 2.7 percent gain over 2009. This MSA showed the third highest growth in personal income among Utah MSAs and ranked 197 (out of 366 MSAs) nationally.

Provo-Orem, UT MSA--With total personal income expansion of 2.8 percent, this MSA tied for second in the Utah ranking and 179 nationally in terms of 2010 growth. During 2010, total personal income measured roughly $13.4 billion.

 St. George, UT MSA--This MSA showed the worst growth performance in the state. Between 2009 and 2010, personal income increased only 1.5 percent to equal $3.6 billion. Still suffering from the economic downturn, net earnings in this MSA dropped by 1.1 percent--the only decline among the Utah MSAs. Nationally, St. George ranked 344 for percent growth nationally.

Salt Lake City, UT MSA--Utah's most populous MSA experienced a 2.8 percent increase in total personal income during 2010. That places Salt Lake City in the number 176 spot for growth among MSAs nationwide. Here, total personal income is estimated at $43.6 billion.

For the complete release on personal income from the Bureau of Economic Analysis, click here.

Feds help pay for Utah’s flood damage

Utah will receive federal aid to pay for this spring’s flood damage. President Barack Obama signed a Utah disaster declaration and ordered federal funds to supplement the recovery effort from flooding between April 18 and July 16.

The funds are available to state, tribal and eligible local governments, and certain private nonprofit organizations, on a cost-sharing basis for emergency work and repair or replacement of facilities damaged by the flooding in the counties of Beaver, Box Elder, Cache, Daggett, Duchesne, Emery, Millard, Morgan, Piute, Salt Lake, Sanpete, Sevier, Summit, Tooele, Uintah, Utah, Wasatch and Weber, and the Uintah and Ouray Indian Reservation. The state could be eligible for $9.5 million in federal aid. Salt Lake Tribune

Has Utah's housing bubble deflated yet?

Housing bubbles aren't like most price bubbles. Typically, speculation drives up prices (of stocks, crude oil, and back in the 17th century even tulips) like an expanding bubble. Eventually, it becomes obvious that item is extremely over-valued and prices "pop" and collapse. Yes, that's why we call them bubbles.

Remember a couple of years ago when gasoline prices went through the roof? You can blame a bubble market in crude oil. (Some SEC reports indicated that 80 percent of crude oil trading during the height of that price expansion was speculative.) In just seven months, the producer price index (seasonally adjusted) for crude oil went from 339.9 to 108.8. That change represents a decrease of almost 70 percent! Talk about a popping bubble. (And, you might want to note the similarity to the current price increases in oil/gasoline.)

On the other hand, housing bubbles tend to slowly deflate rather than pop. Why? Think about it. If you bought a home at the height of the bubble for $400,000 do you really want to sell it for $250,000? No. Most private individuals aren't able to afford that kind of loss. For many American families, a home is their largest asset. So, if you must sell, you will keep trying to sell at a higher price until the market makes it clear that just isn't going to happen. In other words, home prices are sticky downward, so it will take longer for home prices to deflate after the speculation ends.

It also becomes readily apparent why there is such a foreclosure mess in this country. Obviously, many home-buyers took out loans they couldn't afford in the long run. Then, the recession exacerbated other home-buyers' ability to pay. In addition, even if home-buyers can afford to make their payments, aren't the incentives skewed towards walking away rather than paying off the $400,000 mortgage on a home that is now worth only $250,000?

Well, this housing bubble has certainly taken its time collapsing. However, the market is working her magic and there does seem to be light at the end of the tunnel--at least according to the Federal Housing Finance Agency's Housing Price Index (HPI). (For more information on the HPI see this previous post or the Agency's website.)

(Click on image to enlarge.)

The chart that accompanies this posting certainly provides a lovely portrait of a housing market bubble for Utah's Metropolitan Statistical Areas (MSAs)--particularly for my own Washington County. You can watch home prices explode and then collapse (the chart shows the percent change compared with the same quarter a year ago--which eliminates seasonality).

The Logan, UT MSA (Cache County) seemed to participate the least in the run up of home prices and also appears closest to the end of the price declines. As of fourth quarter 2010 (the most recent index available):

• Logan home prices are down only 1.0 percent compared with prices in fourth quarter 2009.
• Ogden-Clearfield MSA home prices are down 1.8 percent.
• Salt Lake City MSA prices are down 2.0 percent.
• Provo-Orem MSA prices are down 2.4 percent.
• St. George MSA prices still show the largest price declines--4.8 percent.

However, for all MSA the price declines are getting smaller and smaller. The market is making her adjustments. In fact, given current trends, most if not all of Utah's MSAs are poised to see the end of home price declines in 2011.

Utah career college to hire 300 to meet demand

Stevens-Henager College is looking to add 300 jobs this year, positions it says are needed to service an influx of students using recession-driven downtime to increase their educations.

The private career college, founded in Salt Lake City in 1891 and now part of a group called CollegeAmerica Services Inc., is advertising for a variety of positions, from admissions representatives to instructors and managers.

Salary levels will range from $30,000 per year for some entry-level positions to a base salary of $175,000 for an upper-level manager, said Eric Juhlin, CEO of CollegeAmerica Services. The Salt Lake Tribune

Hotels see boost in May

Utah hotels saw a nice little bump in business last month, especially compared with May 2009. Typically a slow travel period, May of last year was even worse than usual, with hotel occupancies across Utah dropping to less than 55 percent each night.

But this May, hotels statewide were 59 percent full on a nightly basis. The average daily room rate did not increase commensurately, but pretty much held steady.

Although occupancy was up 4 percent, the statewide room rate could not keep pace. Still, it rose about $1.50, to $86.70 nightly last month, according to figures from the Denver-based Rocky Mountain Lodging Report. The Salt Lake Tribune

Utah Hotel Occupancy

Hotels statewide generally filled more rooms last month than in May 2009 (in parenthesis):

Salt Lake County » 66.3 percent (59.4)
Ogden » 68.5 (67.2)
Davis County » 68.3 (68.0)
St. George » 59.0 (54.4)
Utah County » 58.9 (55.0)
Logan » 52.3 (37.4)
Cedar City » 46.5 (51.9)
Mountain resorts » 24.9 (25.7)
Rest of Utah » 71.4 (68.3)
Total » 59 (54.9)

Source » Rocky Mountain Lodging Report

Home prices still falling in Utah's metropolitan areas

According to information released by the Federal Housing Finance Agency, home prices have yet to bottom-out in Utah's various Metropolitan Statistical Areas. Compared to prices a year ago, St. George MSA prices are down almost 18 percent, prices in the Provo-Orem MSA are down 13 percent and the Salt Lake City MSA prices are down about 10 percent. Both the Ogden-Clearfield MSA (down 6 percent) and the Logan MSA (down 3.4 percent) show slower home price declines.

Allstate looking to open 30 offices in Utah

With roots reaching back to the Great Depression, Allstate insurance company believes tough times like now are ripe for expansion, so it is looking to open 30 offices in Utah.

Allstate, which already has more than 14,000 exclusive agents and financial representatives in the United States and Canada, is recruiting "self-motivated entrepreneurs" to become agents in Salt Lake City, Ogden, Logan and Provo.

The company does not charge a franchise fee, its website noted, and gives selected agents the independence to run their own offices. Agents get commissions on their sales as well as several benefits affiliated with Allstate's stature as a Fortune 500 firm with $133 billion in total assets and 13 major lines of insurance.

Those benefits include access to an education curriculum with information about insurance product and sales skills, help with marketing, website development and signage, technical and customer service support from headquarters and bonuses and performance incentives. The Salt Lake Tribune