“Despite a historically challenging year, we have reason for hope and are poised for a strong rebound,” said Gardner Institute Director Natalie Gochnour. “This pink collar recession, with many women dropping out of the workforce to raise and school their children, will be an obstacle we must overcome for the Utah economy to fully recover. I also expect yet another round of economic stimulus to occur that will increase spending for infrastructure and other targeted projects. This stimulus, coupled with pent up demand, will bode well for our short-term recovery.”
Highlights from the report include the following:
Employment: In the early spring, the forecast for 2020 was bleak as the unemployment rate in April climbed to roughly 10%. But as the year unfolded, the resiliency of the Utah economy was on full display. By November, Utah’s year-over employment was down only 0.2%, the smallest employment decline of any state, and the unemployment rate had dropped to 4.3%. Nationwide employment was down by 6.0%, and the unemployment rate was at 6.7%.
Travel & Tourism – Although the job market in Utah has fared better than in any other state, not all industries escaped the impact of COVID-19. Tourism has been hard hit, with national park visits down 32%. Bryce Canyon suffered the worst decline with a drop of 32% in visitations. Third-quarter data for accommodations services (hotels and motels) show a drop of 22% in lodging. Restaurants and fast food establishments have also been hurt, but the impact appears to be less than expected. Take-out and delivery have given some buffer to sit-down restaurants.
Retail sales – Retail sales activity overall has been surprisingly strong. The 2020 forecast for taxable retail sales shows an increase of 13.3%, with building and garden establishments and grocery stores particularly strong.
Exports – Utah exports in 2020 are forecast to reach $17.6 billion, the third-highest year on record. Notably, the value of other export commodities (excludes gold) at $8.7 billion will be the highest ever, with electronics and agricultural products among Utah’s major export products.
Housing & Construction – The forecast for residential construction shows a record of 30,745 dwelling units, surpassing the previous record high of 28,285 in 2005. The value of residential construction will top $6.3 billion. The housing boom in apartments and condominiums continues, and single-family construction will have the best year since 2006. Housing demand has not slowed with COVID-19, as historically low mortgage rates attract buyers to the market. The strong demand has pushed up housing prices. The median sales price of a single-family home in Utah will be up by 11% to $385,000 in 2020. The construction boom includes nonresidential construction with $2.3 billion in value in 2020. The total value of permit authorized construction (residential, nonresidential, and additions, alteration and repairs) will be $10.3 billion in 2020, a record year as well.
The Economic Report to the Governor is prepared by the Utah Economic Council and is a collaborative endeavor of the University of Utah’s David Eccles School of Business and Governor’s Office of Management and Budget.
In addition to the report, the Gardner Institute released a companion piece titled Utah Informed: Visual Intellection for 2021. Utah Informed is a collection of tables, charts, ideas, and schematics designed to inform Utahns on the latest compelling trends and to spur innovative ideas. The Gardner Institute publishes Utah Informed annually in partnership with the Salt Lake Chamber.
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