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Utah Economic Summit - Natalie Gochnour 2012 04-10

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  • 1. Utah Economic Report The Governor’s Utah Economic Summit April 10, 2012
  • 2. Innovation andInvestment
  • 3. Olympic Math Viewers -- 2.1 billion from 160 countries Guests of state -- 350 VCs and 600 corporate guests World leaders -- 77 countries and 8 presidential Cabinet members Visitors – 220 thousand Print media -- $22.9 million in earned advertising Torch relay -- 11,250 people carried the torch in 46 states Subsequent games -- Torino and Vancouver Games Subsequent events -- Seven World Cups or U.S. Championships
  • 4. “The Olympics remain the mostcompelling search for excellencethat exists in sport, and maybe inlife itself.” - Dawn Draser, Australian swimmer, 3-time winner of Olympic Games.
  • 5. UtahEconomic Basics
  • 6. $ 115 Billion Gross State Product
  • 7. Rank 33 rd In size among states
  • 8. Less than 1% of U.S. economy
  • 9. Utah job growth 2.5%Compared to 1.6% nationally
  • 10. Fastest Growing Economies Job growth Feb. 2011 – Feb. 2012North Dakota 6.8% Oklahoma 2.8% Utah has the third Utah 2.7% fastest growing 2.6% economy in the country Texas Colorado 2.2% Louisiana 2.1% 0.0% 2.0% 4.0% 6.0% 8.0% Year-Over Percent Change Source: GOPB Analysis of Bureau of Economic Analysis Data
  • 11. Gross Domestic Product by Industry 201024% 22% 21%20% Utah U.S. 17%16% 14% 14% 13% 13% 12% 12%12% 11% 9%8% 7% 6% 5% 5% 4% 4%4% 3% 3% 3% 3% 2%0% Ag. Natl Const. Mfg. Trade, Information Finl Prof. & Bus. Educ. & Leisure Other Serv. Govt Res. & Min Trans., & Services Health Utilities Source: Bureau of Economic Analysis
  • 12. Economic Diversity Hachman Index: Ten most diversified economies in the country Illinois 95.3 Missouri 94.0 Colorado 93.6Pennsylvania 93.3 California 92.7 Utah 92.2 Tennessee 92.1 Minnesota 91.8 Washington 91.6 Florida 90.8 88 89 90 91 92 93 94 95 96 Source: GOPB Analysis of Bureau of Economic Analysis Data
  • 13. Utah Employment Seasonally adjusted1,320 PEAK1,270 Peak to trough a loss of 80K-90K jobs!1,220 Trough1,1701,1201,0701,020 00 01 02 03 04 05 06 07 08 09 10 11 12Source: U.S. Bureau of Labor Statistics; March 2012
  • 14. Utah Job Growth Monthly Year-Over Percent Change4.0% Healthy expansion3.0% 2.5% 2.9% 2.7%2.7% 2.5%2.5%2.6%2.5% Modest expansion 2.1%2.0% 1.5%1.5%1.5% 1.5% 1.5% 1.8% 1.6%1.5%1.6% 1.2% 1.0%1.0% 0.7% 0.8%0.0% Jun-10 Jun-11 Feb-10 Jul-10 Feb-11 Feb-12 Apr-10 Apr-11 Jul-11 August-09 Dec-09 Aug-10 Dec-10 March-11 Aug-11 Dec-11 Oct-09 Nov-09 Jan-10 Oct-10 Nov-10 Jan-11 Oct-11 Nov-11 Sep-09 Mar-10 Sep-10 Sep-11 Jan-12 May-10 May-11-1.0% -1.4%-2.0% -1.9% -2.3%-3.0% -2.8%-2.9% -3.1% -3.3%-4.0% -4.1% -4.4%-5.0% Source: Utah Department of Workforce Services and Salt Lake Chamber
  • 15. Utah Job Growth Monthly Year-Over Percent Change4.0% Free-riding3.0% 2.5% 2.9% 2.7%2.7% 2.5%2.5%2.6%2.5% Training wheels 2.1%2.0% 1.5%1.5%1.5% 1.5% 1.5% 1.8% 1.6%1.5%1.6% 1.2% 1.0%1.0% 0.7% 0.8%0.0% Jun-10 Jun-11 Feb-10 Jul-10 Feb-11 Feb-12 Apr-10 Apr-11 Jul-11 August-09 Dec-09 Aug-10 Dec-10 March-11 Aug-11 Dec-11 Oct-09 Nov-09 Jan-10 Oct-10 Nov-10 Jan-11 Oct-11 Nov-11 Sep-09 Mar-10 Sep-10 Sep-11 Jan-12 May-10 May-11-1.0% -1.4%-2.0% -1.9% -2.3%-3.0% -2.8%-2.9% -3.1% -3.3%-4.0% -4.1% -4.4%-5.0% Source: Utah Department of Workforce Services and Salt Lake Chamber
  • 16. Utah Job Growth by Industry February 2012 Total 2.6 Natural Resources 10.1 4.9 Construction Manufacturing 4.3 Trade, Trans, Utilities 1.9 Information 4.5 Financial Activities 4.4 Prof. and Business 3.9 Education and Health 3.0Leisure and Hospitality 0.3 Other Services 2.1 Government 0.0 0 2 4 6 8 10 12 Year-Over Percent Change Source: Utah Department of Workforce Services
  • 17. Critical issues  Discouraged workers  Housing  Oil prices
  • 18. Discouraged Workers
  • 19. 72%Pre-recession labor force participation rate 66% Post-recession labor force participation rate
  • 20. Utah Labor Force Participation 75 No significant change in last recession Number of unemployed if participation 70 Unemployed rate of past 20 years held – 133,600 people 65 Employed Employed % at a 28 year low 60 55 50 76 81 86 91 96 01 06 11Source: U.S. Bureau of Labor Statistics; LAUS: January 2012 LAUS = Local Area Unemployment Statistics
  • 21. Utah’s Potential Timeline to Recovery Employed1,700,0001,600,000 Trend without the Recession1,500,0001,400,0001,300,0001,200,000 Recovery Path1,100,0001,000,000 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
  • 22. Housing
  • 23. Thousands of Units 0 5 10 15 20 25 30 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Single-Family 1990 1991 1992 1993 1994 1995 1996 Multi-Family 1997 1998 1999Source: University of Utah, David Eccles School of Business, Bureau of Economic and Business Research 2000 Total 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Utah Residential Construction Activity 2011 2012f 2013f 2014f
  • 24. Utah’s Housing StockYear Housing Stock Housing Stock Excess Housing Change Inventory2010 982,400 10,900 18,6002011 991,900 9,400 12,9002012 1,000,600 8,700 6,9002013 1,010,600 10,000 1,0002014 1,023,600 12,500 -5,1002015 1,039,200 15,600 -11,300 Ivory Homes, Ivory Institute
  • 25. Oil Prices
  • 26. Oil Prices 101 A penny increase in the cost/gallon costs consumers $1.25 billion over the subsequent year. Gas prices are up 60 cents since late 2011. U.S. consumers will take a $75 billion hit this year. If prices rise further the entire $100 billion tax cut will be erased.
  • 27. “An issue ignored isa crisis invented.” - Henry Kissinger
  • 28. Oil prices U.S. European debt crisisConcerns Policy paralysis Over regulation U.S. corporate tax rate
  • 29. National economy Utah EducationConcerns division/complacency State-level immigration reforms Infrastructure complacency
  • 30. Two Economic Laws1st Law – For every economist thereexists an equal and oppositeeconomist.2nd Law – They are both wrong. - David Wildasin
  • 31. U.S. Best universitiesOptimism Best capital markets Best rule of law Near-best demographics
  • 32. Downtown Rising International trade Utah Marquee expansionsOptimism Internal population growth Western hub PAC 12 Public policy leadership

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