2023 Economic Report to the Governor highlights economic uncertainty in year ahead

January 12, 2023 (Salt Lake City) – The Kem C. Gardner Policy Institute today presented the 35th Economic Report to the Governor to Utah Gov. Spencer Cox at the 2023 Economic Outlook & Public Policy Summit, hosted by the Salt Lake Chamber. The report has been the preeminent source for data and commentary on Utah’s economy for over three decades, with the latest edition noting Utah’s economic resiliency in 2022 while also highlighting an uncertain economic environment heading into 2023.

While economic challenges such as high inflation, rising interest rates, low consumer sentiment, and slowing construction and real estate markets remain, many economic buffers exist. Low unemployment, improving supply chains, and strong overall household, firm, and state and local government financial reserves combine to protect against economic challenges.

“Given recent trends, three economic scenarios seem plausible for 2023,” said Gardner Institute chief economist Phil Dean. “Wise decision-makers will prepare to respond to any of the three scenarios by following the indicators, making mid-course corrections, and applying vigilance and caution while still pursuing opportunities.”

The Economic Report presents three visible economic scenarios for the coming year:

  • Scenario 1: Continuing Growth – Inflation recedes, interest rate hikes stabilize, historically high financial reserves and low debt levels prop up consumer spending, employers work to retain employees considering recent hiring challenges, and international geopolitical and supply chain challenges stabilize, combining to create 2023 real GDP growth in the 2% to 4% range (similar to 2022 Q3 and Q4).
  • Scenario 2: Shallow Recession – High inflation comes down slowly, continued rapid interest rate hikes drive down consumer and firm demand for large capital acquisitions, sizable construction slowdowns and layoffs extend broadly into other sectors, continued international challenges remain disruptive similar to 2022, resulting in a relatively short (two to three quarters) and mild -1% to 1% change in 2023 real GDP.
  • Scenario 3: Decelerating Growth – Inflation moderates somewhat, interest rate hikes continue but slow down, household financial buffers only partially offset broader economic challenges, including layoffs in interest-rate-sensitive sectors such as construction, resulting in 2023 real GDP growth in the 0% to 2% range.

The Utah Economic Council prepares the Economic Report to the Governor under the direction of the University of Utah’s David Eccles School of Business and Governor’s Office of Management and Budget.

The Economic Report to the Governor and Summary Highlights are now available online.

 

ABOUT THE UTAH ECONOMIC COUNCIL

The Utah Economic Council, led by the David Eccles School of Business and the Governor’s Office of Planning and Budget, supports an improved understanding of the Utah economy through informing research activities, sharing economic commentary, and providing peer review to its members. The Council also oversees the content, production, and distribution of the annual Economic Report to the Governor:

Phil Dean, Kem C. Gardner Policy Institute, Co-Chair

Nate Talley, Governor’s Office of Planning and Budget, Co-Chair

Jonathan Ball, Office of the Legislative Fiscal Analyst 

Casey Cameron, Department of Workforce Services

Sophia DiCaro, Governor’s Office of Planning and Budget 

Richard Fowles, University of Utah

John Gilbert, Utah State University

Natalie Gochnour, David Eccles School of Business/Salt Lake Chamber

Dan Hemmert, Governor’s Office of Economic Opportunity

Leslee Katayama, Utah State Tax Commission

Mark Knold, Utah Department of Workforce Services

Nate Lloyd, Kem C. Gardner Policy Institute

Adam Looney, University of Utah

Thomas Maloney, University of Utah

Carrie Mayne, Utah System of Higher Education

Darin Mellott, CBRE 

Leslee Katayama, Utah State Tax Commission

Jacoba Larsen, Utah State Tax Commission

Carrie Mayne, Utah System of Higher Education

Maddy Oritt, Office of the Legislative Fiscal Analyst

Michael Parker, Ivory Homes

Robbi Poulson, Governor’s Office of Planning and Budget

Nate Seegert, University of Utah

Shawn Teigen, Utah Foundation

Robert Spendlove, Zions Bank

David Stringfellow, Office of the Utah State Auditor

Juliette Tennert, Utah System of Higher Education

Richie Wilcox, Governor’s Office of Planning and Budget

Andrea Wilko, Office of the Legislative Fiscal Analyst

James A. Wood, Kem C. Gardner Policy Institute

 

ABOUT THE GARDNER POLICY INSTITUTE

The Kem C. Gardner Policy Institute serves Utah by preparing economic, demographic and public policy research that helps the state prosper. We are Utah’s demographic experts, leaders on the Utah economy, and specialists on public policy and survey research. We are an honest broker of INFORMED RESEARCH, which guides INFORMED DISCUSSIONS, and leads to INFORMED DECISIONS™. For more information, please visit gardner.utah.edu or call 801-587-3717.

 

ABOUT THE DAVID ECCLES SCHOOL OF BUSINESS

The Eccles School is synonymous with ‘doing.’ The Eccles experience provides a world-class business education with a unique, entrepreneurial focus on real-world scenarios where students put what they learn into practice long before graduation. Founded in 1917 and educating more than 6,000 students annually, the University of Utah David Eccles School of Business offers nine undergraduate majors, four MBAs, eight other graduate programs, a Ph.D. in seven areas and executive education curricula. The School is also home to 12 institutes, centers, and initiatives, which deliver academic research and support an ecosystem of entrepreneurship and innovation. For more information, visit Eccles.Utah.edu or call 801-581-7676.