New reports show healthy Salt Lake economy but gaps remain
Utah’s economy is booming and the state is experiencing unprecedented growth in tourism and multifamily development. Two reports released this month, by the Brookings Institute and the University of Utah’s Kem C. Gardner Policy Institute, show that Utah leads in several categories but some disparities continue that could impact the state’s future ability to compete.
According to the 2017 Economic Report to the Governor by the Kem C. Gardner Policy Institute, in 2016 Utah was a national leader in job growth with a growth rate of 3.6 percent. The report shows job growth across all sectors and shows the growing influence of tourism on the state’s economy.
While state leadership is focused on expanding the state’s extraction of natural resources, job growth in Utah is being driven by significant gains in the construction, leisure/hospitality and professional/business services sectors which grew by 6.8, 6.1 and 5.4 percent respectively. In comparison, the natural resource sector grew the least in 2016, with a growth rate of 1.2 percent. The growth in the leisure/hospitality sector is partially attributed to record visits to the state’s five national parks last year.
The University of Utah report also notes that Utah’s population hit 3 million in 2016 and was the fastest growing state that year with a growth rate of 2.7 percent. Unlike past years where Utah’s growth was predominantly driven by natural increase, in 2016 net in-migration accounted for 40 percent of the overall population growth with of just over 24,000 moving to Utah from other states.
Despite Utah’s robust economic growth, the report’s authors list several potential warning signs that could impede future economic growth. Those areas of concern include air quality, worker supply and education. Utah’s economy is growing faster than the state can produce skilled workers and the state’s historically low education funding could impact not only the quality of the state’s workforce but businesses’ ability to recruit new workers to the state.
Based on the 2010 Census, 31.1 percent of Utah residents over the age of 25 have at least a bachelor’s degree compared to 29.8 percent nationally. Utah’s rate of higher education attainment may be above the national average, but compared to peer metro areas the state’s largest metro, Salt Lake, ranks toward the bottom end in the percentage of adults with at least a bachelor’s degree.
The Brookings Institute’s Metro Monitor report looks at economic growth among the largest metropolitan areas and supports many of the same findings from the University of Utah economic report. The authors of the Brookings report tracked economic data between 2010 and 2015 to rank the economies of the 100 largest metro areas based on growth, prosperity and inclusion.
In the Brookings report, the Salt Lake Metro ranks 13th in growth, 61st in prosperity and 9th in inclusion.
The growth ranking is based on a metro’s product output, the number of jobs and entrepreneurial activity based on the number of young firms. Salt Lake ranked fourth in the number of young firms, 17th in overall job growth and 37th in gross metropolitan product.
The Brookings authors used productivity, average income and standard of living to measure a metro area’s prosperity. Salt Lake ranked in the bottom half of the largest metro areas in prosperity, ranking 77th in productivity, 50th in standard of living and 22nd in average annual wage.
Salt Lake ranked high in inclusion, coming in at ninth nationally. Brookings authors used poverty rates, employment rates and median wage to measure inclusion. Salt Lake ranked high for its low poverty rate and high participation in the workforce, ranking 24th for employment, 34th for median wage and sixth for low poverty rate. Salt Lake’s high inclusion ranking was partially driven by rising employment and median wages across all racial demographics, with Black, Hispanic and Asian residents seeing gains in both wages and employment well above the national average. The exception was employment growth among White residents, which saw growth at a rate on par with the national average.
As with the Kem C. Gardner economic report, the Brookings report shows that Salt Lake’s economy is performing well but there are some areas of concern. Based on both reports, the Wasatch Front’s low per-pupil education funding, poor air quality, below average productivity and middle-of-the-road standard of living are areas in which the region underperforms and could be deterrents to future economic growth.
