Utah Outlook
Over the last several years, Utah has outperformed a sluggish national economy. Absent any significant deterioration in the macro-economic environment, this trend is expected to continue. Still, it is important to recognize that the state’s economy is not completely insulated from exogenous pressures. Recent data indicate the state’s economy softened from the spring going into the fall of 2013, reflecting a similar trend nationally; but this is expected to be a temporary dip in growth levels and should not extend beyond the first half of 2014. However, as growth rates level off in Utah, the spread between national and state growth levels will narrow in 2014.
Improvement in the state’s labor market will continue during the coming 12 months. Job growth, at 3.1 percent in 2014, will be near, but slightly below the state’s long-term average. This growth will bring Utah’s unemployment level down to 4.2 percent by the end of 2014. However, it should be noted that labor participation rates in the state continue to be of concern; while Utah recovered all of the jobs lost during the Great Recession, labor force participation remains well below pre-recession levels. Frustratingly, while employment growth
in Utah is expected during 2014, anticipated levels will remain below potential.
Aside from the possibility of unanticipated shocks on a global or national level, primary risks to the state’s economic outlook emanate from a lack of policy leadership from Washington. However, there is reason to be optimistic that extremely negative policy outcomes can be avoided. For example, the Murray-Ryan budget deal lessened the impact of budget cuts called for in the Budget Control Act of 2011. This is worth noting, because although sequestration would be manageable for state agencies, the potential for greater economic damage would come from defense cuts and negative effects on consumer and business confidence.
Direct impacts of the federal sequester, which began in 2013, are already being felt in the state. One company with a significant presence in Utah reduced its workforce through a combination of layoffs and employee buyouts during the third quarter of 2013. This reduction represented roughly 12 percent of the firm’s area workforce. Federal budget cuts were
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 5
Note: Axis does not start at zero Source: Bureau of Labor Statistics
56% 58% 60% 62% 64% 66% 68% 70% 72% 74% 1976197819801982198419861988199019921994199619982000200220042006200820102012 Utah U.S.
Figure 6 Labor Force Participation Rate
cited as the reason for decreased demand for products and services, necessitating the reduction.
However, recent news that Hill Air Force Base was chosen to house the new F-35 Joint Strike Fighter bodes well for the future of defense-related activity in Utah. The nation’s first operational fleet of the new jet will be located at Hill Air Force Base where F-35 maintenance and support are already present. Nevertheless, it is unlikely the state will completely escape negative effects from budget cuts, but such news provides assurances Utah will be spared from worst-case scenarios.
Another concern for Utah’s economy is reduced production at Rio Tinto Kennecott’s Bingham Canyon Mine due to its large contribution to economic activity. Production fell at the site due to a massive landslide that occurred early in 2013. However, such effects will be temporary as affected areas will be brought back online over the course of the next 24 to 36 months. Furthermore, production in unaffected areas, as well as activities to recover production in damaged areas, will continue to support the state’s economy.
Aside from negative risks, there are many developments in the state that will support growth over the short term and continue to yield dividends into the future. Two notable projects with regional and potentially broader impacts include the Huntsman Cancer Institute’s $100 million expansion and the $2.3 billion Terminal Redevelopment Program at Salt Lake City International Airport. Both projects will serve to enhance northern Utah’s profile on several levels and provide worldclass services. The positive impact of these projects will be felt starting in 2014 as construction commences.
Looking ahead, Utah’s favorable demographic profile, continued labor market improvements and particularly dynamic
sectors such as tech, energy and medical research will fuel growth. Another key area, housing, will contribute to growth during the coming year. Additionally, as companies look to guard their bottom line amid an uncertain atmosphere, Utah’s stable and low-cost business environment will continue to support existing operations and attract new businesses and capital.
Conclusion
During the coming year, Utah will experience moderate growth. Nationally, growth levels are expected to continue improving. However, the state economy will not outperform the U.S. to the degree that it did following the Great Recession. Although steady improvement is expected during the coming year, questions remain going forward.
Structural issues plaguing large economies around the globe with broad implications will continue to weigh on growth and add to risks beyond 2014. On a national level, the RyanMurray budget deal provides hope that worst-case scenario budget battles will not occur during the coming year. However, the debt ceiling will need to be raised in 2014. The manner in which policymakers handle this issue will impact the U.S. and Utah economies during the coming year. Consequently, policymakers will remain in the economic driver’s seat in 2014. In addition to fiscal questions, efforts by the Federal Reserve to begin normalizing monetary policy will affect markets and possibly broader economic conditions.
Although Utah’s economic outlook gives much reason for optimism, a proactive stance on the part of policymakers will be required to realize its full potential. In a rapidly evolving and competitive global economy, the state’s ability to manage environmental issues, enhance its human capital through education and maintain adequate infrastructure will be key areas affecting growth over the long term.
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 6
Economic Indicators
Demographics
The State of Utah’s official July 1, 2012 population was estimated to be 2,852,589, an increase of 1.4 percent from 2011, according to the Utah Population Estimates Committee (UPEC). This is lower than the decade-high growth of 3.1 percent experienced in 2005. A total of 38,666 people were added to Utah’s population, with 6 percent of this increase coming from people moving into the state. Utah’s unique
characteristics of a high fertility rate and low mortality consistently contribute to strong natural increase, the difference between births and deaths. The 51,573 births led to a strong natural increase of 36,356. Deaths within the state totaled 15,217 in 2012. Natural increase accounted for 94 percent of total population growth.
2013 Census Bureau State Population Estimates
The Census Bureau produces population estimates which differ from UPEC estimates due to different estimation methodologies. At the end of December 2013, the U.S. Census Bureau released the July 1, 2013 population estimates for the nation and states. The total July 1, 2013 population estimate for the United States was 316,128,839. This represents a population increase of 2,255,154 people or 0.7 percent from 2012. This is the slowest national growth since the 1940s. Utah’s 2013 total population estimate was 2,900,872. This represents a population increase of 46,001 people or 1.6 percent from 2012, ranking Utah third among states and the District of Columbia in population growth. Utah grew more than twice as fast as the nation from 2012 to 2013.
The majority of states with the highest growth rates from 2012 to 2013 were located in the West and South regions of the United States. The top ten states or equivalent with the highest growth rates include: North Dakota (3.1 percent), District of Columbia (2.1 percent), Utah (1.6 percent), Colorado (1.5 percent), Texas (1.5 percent), Nevada (1.3 percent), South Dakota (1.3 percent), Florida (1.2 percent), Arizona (1.2 percent), and Washington
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 7
Source: Utah Population Estimates Committee Box Elder 0.5% Cache 1.0% Rich -0.9% Weber 1.0% Tooele 1.4% Salt Lake 1.2% Morgan 2.5% Summit 1.3% Daggett -0.7% Utah 2.0% Wasatch 3.7% Duchesne 2.4% Uintah 3.4% Juab 1.0% Sanpete -0.4% Carbon -0.3% Emery -1.4% Grand 1.1% Millard 0.3% Piute -0.5% Garfield -0.5% Sevier 0.1% Wayne -0.6% San Juan 1.9% Iron 0.2% Beaver -0.4% Washington 1.5% Kane 1.0% Davis 1.5% State Average =
Increase of 1.0% to 1.8% Population Loss Increase of 2.8% or greater Increase of 1.9% to 2.7% Increase of 0.0% to 0.9%
Figure 7 Utah Population Growth Rates by County: 2011-2012
1.4%
(1.1 percent). The United States increased by 2.3 million people from 2012 to 2013. Texas had the largest population increase (387,397) followed by California (332,643), Florida (232,111), North Carolina (99,696), and Colorado (78,909). With a numerical increase of 46,001, Utah moved up from the 34th largest state in the nation to the 33rd largest, surpassing Kansas (2,893,957).
Utah Population Estimates Committee
Utah’s counties experienced varying growth rates in 2012. Differing from recent years, the most rapid growth rates occurred in counties in the Uintah Basin area and along the Wasatch Back, as well as in counties adjacent to larger population centers. Counties that grew faster than the state rate of 1.4 percent were Wasatch, with the highest growth rate of 3.7 percent, followed by Uintah (3.4 percent), Morgan (2.5 percent), Duchesne (2.4 percent), Utah (2.0 percent), San Juan (1.9 percent), Washington (1.5 percent), and Davis (1.5 percent) counties. Nine counties had very small decreases in population from 2011 to 2012. These counties are mostly located in the central and southwest areas of the state.
2014 Outlook
Utah will continue to experience population growth at a rate higher than most states in 2014 on account of strong natural increase in addition to in-migration. Natural increase (births less deaths) is anticipated to add 37,200 people to Utah’s population. While net in -migration has slowed during the economic recession, Utah’s net migration is projected to increase to 11,700 people.
Table 4
Utah Population Estimates, Net Migration, Births, and Deaths
July 1stPercentNetNatural Fiscal YearFiscal Year YearPopulationChangeIncreaseMigrationIncrease BirthsDeaths
1960900,0003.5%30,10010,04720,05326,0115,958 1961936,0004.0%36,00015,37120,62926,5605,931 1962958,0002.4%22,0001,81720,18326,4316,248 1963974,0001.7%16,000-3,31719,31725,6486,331 1964978,0000.4%4,000-13,86317,86324,4616,598 1965991,0001.3%13,000-3,55316,55323,0826,529 19661,009,0001.8%18,0002,81015,19021,9536,763 19671,019,0001.0%10,000-6,35016,35023,0306,680 19681,029,0001.0%10,000-6,02916,02922,7436,714 19691,047,0001.7%18,00079817,20224,0336,831 19701,066,0001.8%19,00061218,38825,2816,893 19711,101,1503.3%35,15014,96620,18427,4007,216 19721,135,1003.1%33,95014,04619,90427,1467,242 19731,168,9503.0%33,85013,81020,04027,5627,522 19741,196,9502.4%28,0006,62121,37928,8767,497 19751,233,9003.1%36,95013,89723,05330,5667,513 19761,272,0503.1%38,15011,76126,38933,7737,384 19771,315,9503.5%43,90014,82429,07636,7077,631 19781,363,7503.6%47,80017,22030,58038,2897,709 19791,415,9503.8%52,20019,86832,33240,2167,884 19801,474,0004.1%58,05024,53633,51441,6458,131 19811,515,0002.8%41,0007,61233,38841,5098,121 19821,558,0002.8%43,0009,66233,33841,7738,435 19831,595,0002.4%37,0004,91432,08640,5558,469 19841,622,0001.7%27,000-2,79329,79338,6438,850 19851,643,0001.3%21,000-7,71428,71437,6648,950 19861,663,0001.2%20,000-8,40828,40837,3098,901 19871,678,0000.9%15,000-11,71326,71335,6318,918 19881,690,0000.7%12,000-14,55726,55735,8099,252 19891,706,0000.9%16,000-10,35526,35535,4399,084 19901,729,2271.4%23,227-3,48026,70735,8309,123 19911,780,8703.0%51,64324,87826,76536,1949,429 19921,838,1493.2%57,27930,04227,23736,7969,559 19931,889,3932.8%51,24424,56126,68336,73810,055 19941,946,7213.0%57,32830,11627,21237,62310,411 19951,995,2282.5%48,50720,02428,48339,06410,581 19962,042,8932.4%47,66518,17129,49440,49511,001 19972,099,4092.8%56,51625,25331,26342,51211,249 19982,141,6322.0%42,2239,74532,47844,12611,648 19992,193,0142.4%51,38217,58433,79845,43411,636 20002,246,4672.4%53,45318,52634,92746,88011,953 20012,290,6322.0%44,1658,91435,25147,68812,437 20022,331,8261.8%41,1945,81535,37948,04112,662 20032,372,4571.7%40,6313,91136,72049,51812,798 20042,430,2242.4%57,76720,52237,24550,52713,282 20052,505,8443.1%75,62038,10837,51250,43112,919 20062,576,2282.8%70,38431,37439,01052,36813,358 20072,636,0772.3%59,84919,67640,17353,95313,780 20082,691,1222.1%55,04513,46841,57755,35713,780 20092,731,5581.5%40,437-32640,76354,54813,785 20102,774,6631.6%43,1044,50138,60352,89814,295 20112,813,9231.4%39,2602,31336,94751,73414,787 20122,852,5891.4%38,6662,31036,35651,57315,217 2013f2,897,2001.6%44,6118,01136,600nana 2014f2,946,1001.7%48,90011,70037,200nana
Note: The Utah Population Estimates Committee revised the population estimates for the years from 2000 to 2009 following the results of the 2010 Census.
Source: Utah Population Estimates Committee
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 8
Source: Utah Population Estimates Committee
0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000
Source: Utah Population Estimates Committee
Figure 8
Utah Components of Population Change
Figure 9 Utah Total Population
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 9
-20,000 -10,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014f Natural
Net
Change
Increase
Migration Population
276,749 373,351 449,396 507,847 550,310 688,862 890,627 1,059,273 1,461,037 1,722,850 2,233,169 2,763,885 3,309,234 3,914,984 4,570,433 5,257,239 5,965,658
19001910192019301940195019601970198019902000201020202030204020502060
U.S. Census Bureau National and State Population Estimates
Rank
July 1, 20122012July 1, 201320132012-20132012-2013Based on AreaPopulationRankPopulationRankChange% Change% Change
U.S. 313,873,685na316,128,839na2,255,1540.7%na
Region
Northeast55,771,792455,943,0734171,2810.3%4 Midwest67,321,425367,547,8903226,4650.3%3 South117,253,9921118,383,45311,129,4611.0%2 West73,526,476274,254,4232727,9471.0%1
State
Alabama4,817,528234,833,7222316,1940.3%35 Alaska730,30747735,132474,8250.7%27 Arizona6,551,149156,626,6241575,4751.2%9 Arkansas2,949,828322,959,373329,5450.3%37 California37,999,878138,332,5211332,6430.9%20 Colorado5,189,458225,268,3672278,9091.5%4 Connecticut3,591,765293,596,080294,3150.1%44 Delaware917,05345925,749458,6960.9%17 District of Columbia633,42749646,4494913,0222.1%2 Florida19,320,749419,552,8604232,1111.2%8 Georgia9,915,64689,992,167876,5210.8%22 Hawaii1,390,090401,404,0544013,9641.0%15 Idaho1,595,590391,612,1363916,5461.0%13 Illinios12,868,192512,882,135513,9430.1%46 Indiana6,537,782166,570,9021633,1200.5%30 Iowa3,075,039303,090,4163015,3770.5%31 Kansas2,885,398332,893,957348,5590.3%39 Kentucky4,379,730264,395,2952615,5650.4%34 Louisiana4,602,134254,625,4702523,3360.5%29 Maine1,328,501411,328,30241-1990.0%50 Maryland5,884,868195,928,8141943,9460.7%24 Massachusetts6,645,303146,692,8241447,5210.7%25 Michigan9,882,51999,895,622913,1030.1%43 Minnesota5,379,646215,420,3802140,7340.8%23 Mississippi2,986,450312,991,207314,7570.2%40 Missouri6,024,522186,044,1711819,6490.3%36 Montana1,005,494441,015,165449,6711.0%16 Nebraska1,855,350381,868,5163713,1660.7%26 Nevada2,754,354352,790,1363535,7821.3%6 New Hampshire1,321,617421,323,459421,8420.1%42 New Jersey8,867,749118,899,3391131,5900.4%33 New Mexico2,083,540362,085,287361,7470.1%48 New York19,576,125319,651,127375,0020.4%32 North Carolina9,748,364109,848,0601099,6961.0%14 North Dakota701,34548723,3934822,0483.1%1 Ohio11,553,031711,570,808717,7770.2%41 Oklahoma3,815,780283,850,5682834,7880.9%18 Oregon3,899,801273,930,0652730,2640.8%21 Pennsylvania12,764,475612,773,80169,3260.1%49
Rhode Island1,050,304431,051,511431,2070.1%45
South Carolina4,723,417244,774,8392451,4221.1%11
South Dakota834,04746844,8774610,8301.3%7
Tennessee6,454,914176,495,9781741,0640.6%28
Texas26,060,796226,448,1932387,3971.5%5 Utah2,854,871342,900,8723346,0011.6%3 Vermont625,95350626,630506770.1%47
Virginia8,186,628128,260,4051273,7770.9%19
Washington6,895,318136,971,4061376,0881.1%10
West Virginia1,856,680371,854,30438-2,376-0.1%51
Wisconsin5,724,554205,742,7132018,1590.3%38 Wyoming576,62651582,658516,0321.0%12
Source: U.S. Census Bureau
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 10
Table 5
Table 6
Utah Population Estimates by County
Census2011 - 20122012 April 1,July 1,July 1,July 1,AbsolutePercent% of Total County2010201020112012ChangeChangePopulation
Beaver 6,6296,6556,6156,589-26-0.4%0.23%
Box Elder 49,97550,11050,46650,7052390.5%1.78%
Cache 112,656113,272114,721115,8511,1301.0%4.06%
Carbon 21,40321,46321,48521,431-54-0.3%0.75%
Daggett 1,0591,0781,1151,107-8-0.7%0.04%
Davis 306,479307,550312,603317,2484,6451.5%11.12%
Duchesne 18,60718,66519,11119,5724612.4%0.69%
Emery 10,97611,01810,99710,846-151-1.4%0.38%
Garfield 5,1725,1845,1495,125-24-0.5%0.18%
Grand 9,2259,2319,3229,420981.1%0.33%
Iron 46,16346,27246,76746,8831160.2%1.64%
Juab 10,24610,25310,32310,4261031.0%0.37%
Kane 7,1257,1377,2087,282741.0%0.26%
Millard 12,50312,51612,59112,625340.3%0.44%
Morgan 9,4699,4699,6689,9132452.5%0.35%
Piute 1,5561,5561,5441,537-7-0.5%0.05%
Rich 2,2642,2702,2762,255-21-0.9%0.08%
Salt Lake 1,029,6551,033,2991,045,8291,059,11213,2831.3%37.13%
San Juan 14,74614,74214,95415,2322781.9%0.53%
Sanpete 27,82227,91428,17328,067-106-0.4%0.98%
Sevier 20,80220,83920,90320,914110.1%0.73%
Summit 36,32436,49637,20837,7044961.3%1.32%
Tooele 58,21858,42259,13359,9848511.4%2.10%
Uintah 32,58832,61933,31534,4351,1203.4%1.21%
Utah 516,564519,299530,789541,37810,5892.0%18.98%
Wasatch 23,53023,68224,45625,3548983.7%0.89%
Washington 138,115138,761141,219143,3522,1331.5%5.03%
Wayne 2,7782,7882,7422,725-17-0.6%0.10%
Weber 231,236232,102233,241235,5172,2761.0%8.26%
MCD
Bear River164,895165,652167,463168,8111,3480.8%5.92%
Central75,70775,86676,27676,294180.0%2.67%
Mountainland576,418579,478592,453604,43611,9832.0%21.19%
Southeastern56,35056,45356,75856,9291710.3%2.00%
Southwestern203,204204,010206,958209,2312,2731.1%7.33%
Uintah Basin52,25452,36253,54155,1141,5732.9%1.93%
Wasatch Front1,635,0571,640,8421,660,4741,681,77421,3001.3%58.96%
State of Utah2,763,8852,774,6632,813,9232,852,58938,6661.4%100.00%
Notes: Total may not add due to rounding. The MCDs are multi-county districts and are divided as follows: Bear River MCD: Box Elder, Cache, and Rich counties; Central MCD: Juab, Millard, Piute, Sanpete, Sevier, and Wayne counties; Mountainland MCD: Summit, Utah, and Wasatch counties; Southeastern MCD: Carbon, Emery, Grand, and San Juan counties; Southwestern MCD: Beaver, Garfield, Iron, Kane and Washington counties; Uintah Basin MCD: Daggett, Duchesne, and Uintah counties; Wasatch Front MCD: Davis, Morgan, Salt Lake, Tooele, and Weber counties.
Sources: April 1, 2010: U.S. Census Bureau; July 1, 2010-July 1, 2012: Utah Population Estimates Committee
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 11
Employment, Wages, and Labor Force
Utah’s labor markets generally benefit from the state’s business-friendly policies, growing population and notable economic diversity. Having officially reached pre-recession employment levels in the latter half of 2012 and picking up momentum in job growth moving into the new year, 2013 was estimated to produce an observable transition from economic recovery to robust expansion. While the factors to support a healthy and growing economy in Utah still exist, forces beyond our state’s borders hinder potential growth and businesses exhibit reluctance to invest in an environment of uncertainty created by issues at the federal government level such as debt ceiling deadlines, budget sequestration and government shut-down.
Regardless of the challenges, Utah’s labor market posted an above-average growth of 3.3 percent in 2013, ending the year with over 41,000 jobs added to the economy. Considering Utah’s economy now supports an employment level of roughly 1.3 million, it is a notable feat to continue posting growth above the long-term average rate of 3.1 percent. Jobs were added across all industry sectors in the Utah economy during 2013, including significant expansion in the information sector driven by the corridor of technology firms that continued to expand along I-15 across the Utah County-Salt Lake County border. The construction industry, which performed well in the early months of 2013 and was projected to boom in the summer given the favorable mortgage rates and relatively low prices in the housing market, instead gave way to slower-than-expected growth rates in the second half of the year.
Monthly unemployment rates in Utah dropped for the first half of the year then remained steady around 4.6 percent in the second half, resulting in a 2013 annual average rate of 4.8 percent. Decreases in the unemployment rate over the year were the result of increases in the number of employed individuals, decreases in the numbers of unemployed, and overall growth in the labor force. However, one negative attribute in Utah’s labor market is the lack of recovery to pre-recession rates of labor force participation. The average rate of labor force participation over the last thirty-five years in Utah has been 69.4 percent, and prior to the Great Recession it was up to 72 percent. Currently, labor force participation sits at roughly 68 percent. To summarize: while unemployment is at a relatively low rate, there is a considerable number of Utah’s working-age population who are choosing not to participate in the labor market altogether.
2014 Outlook
Given lower than average labor force participation rates, lingering uncertainty in fiscal policy at the federal level, along with ongoing sequestration cuts and debt limit deadlines on the horizon, Utah’s labor market is projected to grow at a rate of 3.1 percent in 2014. The state will likely continue into early 2014 with slower-than-average labor market growth. However, if the federal government is able to calm the nerves of investors, Utah is in an excellent economic position to benefit greatly. The state continues to be supported by educated workers, a growing population, and favorable business policies such that growth could be easily accelerated in the latter half of the year.
Source: U.S. Bureau of Labor Statistics
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 12
Figure 10
0% 2% 4% 6% 8% 10% 12% 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Utah United States
Utah Unemployment Rate
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 13
Utah
estimate
forecast Source: Utah Department of Workforce Services e = estimate f = forecast
Annual
Utah
Employment -8% -6% -4% -2% 0% 2% 4% 6% 200220032004200520062007200820092010201120122013e2014f Utah U.S. -6% -4% -2% 0% 2% 4% 6% 8% 10% 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014f
Figure 11 Year-Over Monthly Change in
Nonfarm Jobs Source: Utah Department of Workforce Services e =
f =
Figure 12
Change of
Nonfarm
Utah
Nonfarm Employment and Unemployment Rate
Total Payroll Employment
PercentAbsoluteUnemployment
Total Payroll Employment
PercentAbsoluteUnemployment YearNumberChangeChangeRateYearNumberChangeChangeRate 1950189,1533.15,6535.51983566,9911.16,0109.2 1951207,3869.618,2333.31984601,0686.034,0776.5 1952214,4093.47,0233.21985624,3873.923,3195.9 1953217,1941.32,7853.31986634,1381.69,7516.0 1954211,864-2.5-5,3305.21987640,2981.06,1606.4 1955224,0075.712,1434.11988660,0753.119,7774.9 1956236,2255.512,2183.41989691,2444.731,1694.6 1957240,5771.84,3523.71990723,6294.732,3854.3 1958240,8160.12395.31991745,2023.021,5735.0 1959251,9404.611,1244.61992768,6023.223,4885.0 1960263,3074.511,3674.81993809,7315.441,1293.9 1961272,3553.49,0485.31994859,6266.249,8953.7 1962286,3825.214,0274.91995907,8865.648,2603.6 1963293,7582.67,3765.41996954,1835.146,2973.5 1964293,576-0.1-1826.01997993,9994.239,8163.1 1965300,1642.26,5886.119981,023,4803.029,4613.8 1966317,7715.917,6074.919991,048,4982.425,0183.7 1967326,9532.99,1825.220001,074,8792.526,3813.4 1968335,5272.68,5745.420011,081,6850.66,8064.4 1969348,6123.913,0855.220021,073,746-0.7-7,9395.7 1970357,4352.58,8236.120031,074,1310.03855.7 1971369,8363.512,4016.620041,104,3282.830,1975.2 1972387,2714.717,4356.320051,148,3204.043,9924.3 1973415,6417.328,3705.820061,203,9144.855,5942.9 1974434,7934.619,1526.120071,251,2823.947,3682.7 1975441,0821.46,2896.520081,252,4700.11,1883.7 1976463,6585.122,5765.720091,188,736-5.1-63,7347.1 1977489,5805.625,9225.320101,181,519-0.6-7,2178.0 1978526,4007.536,8203.820111,208,6502.327,1316.7 1979549,2424.322,8424.320121,248,9353.340,2855.7 1980551,8890.52,6476.32013e1,290,4323.341,4974.8 1981559,1841.37,2956.72014f1,330,3503.139,9184.2 1982560,9810.31,7977.8
Source: Utah Department of Workforce Services e = estimate f = forecast
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 14
Table 7
Table 8
Utah Population, Labor Force, Nonfarm Jobs by Industry, and Wages
Civilian Labor Force1,362,8531,346,8501,353,5971,392,1821,427,979-1.20.52.92.6
Employed Persons1,252,4661,254,1511,276,2491,325,8681,367,5560.11.83.93.1
Unemployed Persons110,38792,69977,34866,31460,423-16.0-16.6-14.3-8.9 Unemployment Rate8.16.95.74.84.2 U.S. Rate9.69.08.17.57.1
Total Nonfarm Jobs1,181,6241,208,5821,248,8931,290,5001,330,4002.33.33.33.1 Mining10,44211,65912,55312,60012,90011.77.70.42.4
Construction65,22365,16869,22574,20079,400-0.16.27.27.0
Manufacturing 111,075113,684116,667120,300123,4002.32.63.12.6 Trade, Trans., Utilities229,133233,248241,870247,600256,3001.83.72.43.5 Information29,27629,49531,29533,70035,9000.76.17.76.5 Financial Activity67,97868,39069,54072,60074,2000.61.74.42.2
Professional & Business Services152,336159,420167,219175,200182,4004.74.94.84.1
Education & Health Services155,005159,211163,594168,400173,2002.72.82.92.9
Leisure & Hospitality110,625113,511118,618124,800128,4002.64.55.22.9
Other Services33,62434,02235,01435,80036,5001.22.92.22.0 Government216,907220,775223,298225,300227,8001.81.10.91.1
Goods-producing186,740190,511198,445207,100215,7002.04.24.44.2 Service-producing994,8841,018,0711,050,4481,083,4001,114,7002.33.23.12.9 Percent Svc.-producing84.2%84.2%84.1%84.0%83.8%
Establishments (first quarter)80,41980,56781,55184,92086,950 Annual Percent Change
Total Nonfarm Wages (millions)$45,876$47,968$50,762$53,227$56,0854.65.84.95.4
Average Annual Wage$38,825$39,689$40,646$41,245$42,2762.22.41.52.5
Average Monthly Wage$3,235$3,307$3,387$3,437$3,5132.22.41.52.2
Note: Numbers in this table may differ from other tables as not all industrial sectors are listed here.
Source: Utah Department of Workforce Services e = estimate f = forecast 2010201120122013e2014f201120122013e2014f
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 15
U.S. Nonfarm Job Growth %-0.71.21.71.71.8
Utah’s total personal income in 2013 was an estimated $105.2 billion, a 4 percent increase from $101.2 billion in 2012. The 2013 increase in personal income was led by strong wage growth, a 4.9 percent increase from 2012. All sources of income were estimated to have positive growth in 2013. Utah’s estimated 2013 per capita income was $36,308, up 2.5 percent from the 2012 level of $35,430. Growth in 2013 was restrained by recent federal tax changes. First, the two percentage point reduction in the personal contribution rate for social security was extended through 2012 but was not extended through 2013. Second, the anticipated expiration of the Bush tax cuts at the end of 2012 caused income to be shifted into
that same year. These federal tax changes contributed to high growth in 2012, while tempering growth in 2013.
2014 Outlook
Moving into 2014 as the economy continues to recover from the recession, Utah personal income is expected to increase by 5.3 percent, a 0.6 percent increase over the anticipated U.S. increase. Per capita personal income is forecast to increase 3.6 percent in 2014, but Utah’s per capita personal income relative to U.S. per capita personal income will decrease slightly to 81.2 percent.
Note: Vertical axis does not begin at zero f = forecast
Source: U.S. Department of Commerce, Bureau of Economic Analysis; Governor’s Office of Management and Budget
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 16
Figure 13
Personal
82.4% 81.5% 80.3% 78.4% 76.3% 75.8% 76.7% 78.1% 77.6% 78.8% 79.7% 80.7% 81.4% 81.9% 81.4% 81.0% 80.9% 81.5% 81.6% 80.5% 80.3% 82.0% 83.4% 84.5% 83.8% 82.4% 80.9% 80.8% 81.0% 81.5% 81.2% 68% 70% 72% 74% 76% 78% 80% 82% 84% 86% 88% 1984198619881990199219941996199820002002200420062008201020122014f
Utah Per Capita Personal Income as a Percent of the United States
Income
Table 9
Total and Per Capita Personal Income
Total Personal Income (Millions of Dollars) (Dollars)
Per Capita Personal Income
Annual Growth Rates
UnitedUtah as %UnitedUnitedUtah as % YearUtahStates of U.S.UtahStatesUtahStates of U.S.
1970$3,611$832,2380.43%11.1% 7.8%$3,389$4,08483.0%
19714,016897,5590.45%11.2%7.8%3,6494,34084.1% 19724,505987,0730.46%12.2%10.0%3,9714,71784.2% 19735,0451,105,4260.46%12.0%12.0%4,3165,23082.5% 19745,6801,217,6730.47%12.6%10.2%4,7385,70883.0% 19756,3841,329,7140.48%12.4%9.2%5,1736,17283.8% 19767,3221,469,3550.50%14.7%10.5%5,7556,75485.2% 19778,3511,626,6210.51%14.0%10.7%6,3447,40285.7% 19789,6251,830,8360.53%15.3%12.6%7,0558,24385.6% 197911,0342,052,0370.54%14.6%12.1%7,7929,13885.3% 198012,5062,292,9030.55%13.3% 11.7%8,49210,09184.2% 198114,1652,572,0700.55%13.3% 12.2%9,34711,20983.4% 198215,5102,757,0480.56%9.5% 7.2%9,95311,90183.6% 198316,7562,941,8570.57%8.0% 6.7%10,50612,58383.5% 198418,4483,256,0480.57%10.1% 10.7%11,37113,80782.4% 198519,5933,482,5200.56%6.2% 7.0%11,92614,63781.5% 198620,4903,683,0910.56%4.6% 5.8%12,32215,33880.3% 198721,2313,909,7710.54%3.6% 6.2%12,65216,13778.4% 198822,2364,216,1230.53%4.7% 7.8%13,16217,24476.3% 198923,7824,541,9960.52%7.0% 7.7%13,94118,40275.8% 199025,7044,831,2820.53%8.1% 6.4%14,84719,35476.7% 199127,5495,013,4840.55%7.2% 3.8%15,47919,81878.1% 199229,6365,335,2680.56%7.6% 6.4%16,13520,79977.6% 199331,9785,558,3740.58%7.9% 4.2%16,84521,38578.8% 199434,8485,866,7960.59%9.0% 5.5%17,77522,29779.7% 199537,7956,194,2450.61%8.5% 5.6%18,76523,26280.7% 199641,1516,584,4040.62%8.9% 6.3%19,89924,44281.4% 199744,5186,994,3880.64%8.2% 6.2%21,00125,65481.9% 199848,0577,519,3270.64%8.0% 7.5%22,18827,25881.4%
199950,5557,906,1310.64%5.2% 5.1%22,94328,33381.0% 200055,0258,554,8660.64%8.8% 8.2%24,51530,31980.9% 200158,6818,983,3880.65%6.6% 5.0%25,69531,52481.5% 200260,2899,145,9980.66%2.7% 1.8%25,93331,79881.6% 200362,0849,479,6110.65%3.0% 3.6%26,30532,67680.5% 200466,15410,043,2840.66%6.6%5.9%27,54634,30080.3% 200572,34410,605,6450.68%9.4%5.6%29,43635,88882.0% 200680,27711,376,4600.71%11.0%7.3%31,78638,12783.4% 200787,38711,990,2440.73%8.9%5.4%33,64039,80484.5% 200891,24912,429,2840.73%4.4%3.7%34,26540,87383.8% 200988,27012,073,7380.73%-3.3%-2.9%32,41239,35782.4% 201090,11312,423,3320.73%2.1%2.9%32,47240,16380.9% 201196,17513,179,5610.73%6.7%6.1%34,17342,29880.8% 2012101,16313,729,0630.74%5.2%4.2%35,43043,73581.0% 2013e105,19214,129,3500.74%4.0%2.9%36,30844,57181.5% 2014f110,81414,796,3200.75%5.3%4.7%37,61446,31681.2%
e = estimate f = forecast
Source: U.S. Department of Commerce, Bureau of Economic Analysis; Utah Revenue Assumptions Working Group; Utah State Tax Commission
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 17
Utah Taxable Sales
In 2013 Utah total taxable sales were estimated to increase by 4.7 percent to an estimated $49.78 billion, which is the fourth consecutive year of positive growth following two years of decline. Taxable sales comprise three major components: retail trade, business investments & utilities, and taxable services. In 2013 it was expected that retail trade accounted for 49.9 percent of taxable sales, while taxable sales in business investment and services accounted for 22 percent and 23.2 percent respectively. Retail trade taxable sales were estimated to increase by 5.8 percent in 2013 to $24.9 billion. Business investment & utility taxable sales were estimated to be $10.9 billion in 2013. This is approximately even with 2012 levels. Taxable services were estimated to increase by 6.5 percent in 2013 to $11.6 billion.
2014 Outlook
Overall growth is expected in 2014 with total taxable sales estimated to increase 4.8 percent to $52.2 billion. Retail trade is projected to grow by 5.1 percent in 2014. Following a year of no growth in 2013, business
investment & utility taxable sales are expected to rebound, growing 4.7 percent in 2014. Taxable services are expected to increase by 4.4 percent in 2014. These increases are expected as a result of rising consumer confidence and improvements in the labor and housing markets but are also restrained by federal spending cuts as well as changes in tax policy.
200920,3298,7409,4661,94640,481-10.3-19.5-9.3-1.6-11.9 201020,4759,3399,6431,93041,3870.76.91.9-0.82.2 201121,79910,18610,0692,04144,0976.59.14.45.76.5 201223,51010,88410,8542,280 47,5317.96.97.811.77.8 2013e24,86410,92911,5602,43149,7845.80.46.56.64.7 2014f26,13411,44112,0682,55552,1985.14.74.45.14.8
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 18
Table 10
Utah Taxable Sales by Component
Source:
Utah State Tax Commission e = estimate f = forecast
Figure 14
State Tax Commission e = estimate f = forecast Millions of DollarsPercent Change Business TotalBusiness Total RetailInvestmentTaxable AllTaxableRetailInvestmentTaxable AllTaxable YearSalesPurchasesServicesOtherSalesSalesPurchasesServicesOtherSales
-25% -20% -15% -10% -5% 0% 5% 10% 15% 20092010201120122013e2014f Percent Change Retail Sales Business Investment Purchases Taxable Services
Percent Change in Utah Taxable Sales by Component Source:
Utah
2008$22,659$10,858$10,438$1,977$45,932
The Consensus Revenue Forecast for the General and Education Fund was released in the Governor’s FY2014 Budget Recommendation. General and Education Fund unrestricted revenue is forecast to decline 1.5 percent ($82 million) in FY2014 to $5,247.24 million, and to increase 3.8 percent in FY2015 to $5,447.22. The primary reason for the FY2014 decline is that final FY2013 revenues came in higher than anticipated due to income shifting into FY2013 from FY2014 as a result of changes in the federal tax law. Also, policy changes increasing the earmarking of sales tax to transportation are restraining the growth in free revenue. Total sales tax earmarks grew from $189.2 million in FY2011 to $332.1 million in FY2012 and to $422.1 million in FY2013. The increase in FY2013 earmarks was largely due to the fact that a new earmark designating 30 percent of the growth in sales tax revenue (from FY2011) became effective. Sales tax earmarks in FY2014 and FY2015 are expected to total $451.6 and $495.3 million, respectively. Total collections, including earmarks, have grown faster than 7 percent for the last three years, with FY2013 growing 8.7 percent. FY2014 collections, including earmarks, are expected to be down slightly at -0.5 percent as income realized in FY2013 rather than FY2014
(due to the anticipated expiration of Bush era tax cuts) affects revenues in the Education Fund. FY2015 revenues, including earmarks, however, are expected to grow 4 percent.
The Utah economy continues to rebound with positive economic indicators, wages, and employment that outpace the nation. Tax collections have received a boost from strength in the housing sector, strong demand for motor vehicles, healthy corporate profits, stock market gains, and steady growth in the labor market. Steady, although modest, economic growth is expected in the next two years. Taxable sales growth is estimated to be 4.8 percent in 2014 and 3.9 percent in 2015. FY2014 revenues, however, will show a slight decline due to the income shift mentioned earlier and the lagged effect of the expiration of the payroll tax cut. Although these one-time events mask the true growth in the Utah economy, there are factors which negatively weigh on the forecast such as political gridlock in Washington and fights over the debt ceiling, evidence of weakness in emerging markets, particularly China, policy action by the Federal Reserve Bank to taper its longterm bond-buying program, increasing mortgage interest rates (and their impact on the housing market), declining consumer
The
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 19
Source: Utah State Tax Commission f = forecast Figure
Inflation-Adjusted Percentage Change in Unrestricted General and Education Fund Revenue 9.4 13.9 -3.5 3.6 7.8 10.0 7.06.36.3 -1.6 3.5 -3.6 19.3 5.7 0.2 1.6 8.9 3.6 1.3 0.4 2.8 5.0 9.7 8.7 7.4 5.9 4.8 2.9 8.1 0.8 -7.2 -1.1 3.2 8.9 15.2 5.8 -4.0 -14.1 -8.7 9.0 2.2 7.9 -3.1 2.0 -20 -15 -10 -5 0 5 10 15 20 25 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Percent Change Fiscal Years
Tax Collections
15
annual
average rate of growth in inflation-adjusted unrestricted revenues (GDP Deflator) from FY1971 to FY2013 was 3.9%.
sentiment, and a slowdown in the rate of growth in the labor market.
2014 Governor’s Budget Recommendation
The Governor’s budget recommendations were based on the November 2013 consensus revenue forecast developed by the Governor’s Office of Management and Budget, the Office of the Legislative Fiscal Analyst, and the Utah State Tax Commission. The outlook for FY 2014 is for a 1 percent decline in total unrestricted revenue. Collections of unrestricted revenue are estimated to fall $60.1 million in FY2014 to $5,845.2 million due to the aforementioned federal tax law changes. Total free revenue is forecasted to grow 3.5 percent to $6,052.2 million in FY2015, an expected increase of $207 million. The expectation is for approximately $132 million in one-time money, including $122 million from the FY2013 revenue surplus, and $206 million in ongoing (unrestricted General and Education) funds available during the next budget cycle.
Fiscal Year 2013: Continued Steady Growth
Total unrestricted General and Education Fund revenues increased $469.7 million to $5,329 million in FY2013, a 9.7 percent increase over FY2012 collections. The February FY2013 Consensus forecast (adjusted for legislation) estimated General and Education Fund free revenues to grow 4.8
percent to $5,092.9 million in FY2013. This underestimated actual growth by $236.1 million or 4.9 percent. Total unrestricted revenue collections (including General, Education, Transportation and Mineral Lease Funds) increased $415.8 million or 7.6 percent in FY2013.
General Fund free revenue edged up 0.4 percent or $7.5 million. The largest General Fund free revenue source, sales and use taxes, grew 2.1 percent to $1,615.9 million in FY2013 as the impact of increasing Transportation Fund earmarks was felt. A total of $422.1 million of sales taxes were earmarked for transportation, water, natural resources and other purposes in FY2013. Total liquor profits jumped 14.9 percent as consumption, demographic patterns, and economic factors combined to push sales up. FY2013 oil and gas and metal severance taxes fell 22.9 percent, significantly more than the 15.2 percent decline forecasted in February, due to declining prices and reduced production. Actual FY2013 beer, cigarette and tobacco taxes fell 3.6 percent, close to the 3.7 percent decline forecast in February. Insurance premium taxes increased 6.1 percent in FY 2013.
Revenue collections in the Education Fund increased $462.2 million or 16.6 percent in FY2013. Individual income taxes grew $392.6 million or 16 percent in FY2013. Federal tax
Actual and Inflation-Adjusted Revenue Surplus for the General and Education Funds
Source: Governor’s Office of Management and Budget
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 20
Figure 16
-$200 -$100 $0 $100 $200 $300 $400 $500 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Millions of Dollars Fiscal Year 2012 Real (GDP Deflator) Nominal
changes caused certain (higher income) individuals to shift income into tax year 2012 (FY2013) from future years to avoid higher tax rates on capital gains and dividends. Withholding grew 7.5 percent to $2,313.7 million, gross final payments jumped nearly 34 percent to $922 million and refunds, which totaled $383.7 million, remained flat at 0.6 percent. Corporate tax collections finished the year up 25.8 percent, outpacing the 16.3 percent growth forecast in February 2013 as healthy business profits and restrained costs contributed to robust growth. Mineral production withholding fell 8 percent, from $28.3 million in FY2012 to $26.1 million in FY2013.
Legislation Impacting Tax Collections
A new sales tax earmark for transportation took effect in FY2013. Legislation passed in 2011, SB 229, Transportation
Funding Revisions, diverts 30 percent of the growth in sales tax revenue (from FY2011) for transportation starting July 1, 2012 (FY2013) until the current 8.3 percent earmark share reaches 17 percent. Several sales tax exemptions passed the 2013 Legislature including exemptions for: 1) machinery and equipment (if used by a person paying admissions or user fees) with an economic life of 3 or more years for NAICS 713 (amusement, gambling, and recreation), 2) database access, 3) short-term lodging consumables, 4) sales of a fuel cell 5) electronic financial payment services and 6) tangible personal property used in the preparation of food if the ownership of the seller and the ownership of the purchaser are the same.
Source: Governor’s Office of Management and Budget f = forecast
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 21
*The
unrestricted fines and fees, investment income, liquor profits, mineral lease, school land income
in fiscal 1988), federal revenue
fiscal 1982), corporate, gross receipts, severance, beer, cigarette, insurance, inheritance and motor fuels taxes.
Figure 17 Sales Tax, Income Tax, and All Other Unrestricted Revenues as a Percent of Total State Unrestricted Revenues 0 10 20 30 40 50 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f Percent of Total Revenues Fiscal Years Others Sales Income
“Others” category includes
(ended
sharing (ended in
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 22 Source: Utah State Tax Commission f = forecast Figure 18 IRS Wage and Non-Wage Income as a Percent of Total Taxable Income 62 64 66 68 70 72 74 76 78 80 0 5 10 15 20 25 30 35 19931994199519961997199819992000200120022003200420052006200720082009201020112012 Wage Percent Non-Wage Percent Calendar Years Non-Wage Income Wage Income
Nominal Revenue ( Millions )
Tax$1,316.4$1,369.6$1,431.4$1,441.3$1,444.0$1,501.9$1,634.5$1,806.3$1,857.8$1,739.4$1,547.5$1,402.7$1,601.4$1,582 .5$1,615.9$1,655.8$1,714.6
Earmarked Sales and Use Tax35.139.243.743.229.039.142.0100.2250.0325.3276.3301.0189.2332.1422.1451.6495.3 Total Sales and Use Tax1,351.51,408.81,475.11,484.51,472.91,541.11,676.51,906.42,107.82,064.71,823.81,703.71,790.61,914.62,038. 02,107.42,209.9
Tax0.00.00.00.00.00.011.720.520.824.124.825.325.428.726.926.927.6
Cable/Satellite Excise
Liquor Profits27.028.730.332.631.737.738.147.353.259.759.758.462.370.881.486.192.4 Insurance Premiums47.752.246.056.659.062.467.471.471.877.283.080.075.984.489.692.395.8 Beer, Cigarette, and Tobacco60.058.057.960.054.262.861.960.862.462.860.658.7125.5125.4120.9117.9116.8
Tax7.917.339.418.926.736.753.571.565.465.571.056.259.965.553.266.369.9
Oil and Gas Severance
Tax5.15.76.25.05.86.011.417.023.626.514.620.927.125.416.919.118.7
Severance
Metal
Tax8.264.630.09.433.09.73.07.40.50.10.30.10.10.00.00.00.0
Inheritance
Investment Income15.019.527.59.76.55.513.640.083.562.825.15.32.45.66.04.44.8
General Fund Other38.040.846.045.346.745.646.450.858.053.454.480.372.395.980.475.475.4
Credit-5.3-4.4-5.4-5.3-5.5-5.6-5.9-5.6-6.2-6.4-6.2-6.4-6.0-6.8-6.3-6.5-6.7
Property and Energy
Total1,520.21,652.11,709.31,673.51,702.11,762.71,935.42,187.52,290.92,165.11,934.61,781.42,046.32,077.52,084.92,13 7.92,209.3
General Fund
Total1,555.31,691.31,753.01,716.71,731.11,801.81,977.42,287.62,540.92,490.42,210.92,082.42,235.42,409.62,507.02,5 89.52,704.6
GF & Earmarks
Tax1,461.31,651.41,705.31,605.31,572.51,692.31,926.62,277.62,561.42,598.82,319.62,104.62,298.22,459.42,852.02 2,763.42,876.4
Individual Income
Withholding1,318.21,452.71,527.51,571.91,544.61,617.91,741.61,929.62,124.02,138.21,962.31,942.12,035.32,151.82,313.72,411.12,53 1.2
Final Payments413.1487.9487.5396.1381.5432.2549.8745.2902.1962.7753.4613.8669.3689.0922.0710.0745.5Refunds-270.1-289.2-309.7-362.7-353.6-357.8-364.9-397.2-464.7-502.1-396.1-451.3-406.4-381.4-383.7-357.7-365.8
Corporate Taxes188.1181.1171.1119.0156.3158.2204.2366.6414.1405.1255.4258.4260.7268.9338.2291.6304.7
Mineral Production Wittholding6.89.319.513.27.217.316.722.723.123.832.524.626.728.326.129.731.6
Other7.68.59.75.65.04.50.09.818.220.119.324.626.625.227.824.625.3
Education Fund
Total1,663.71,850.41,905.51,743.01,741.01,872.22,147.62,676.83,016.83,047.82,626.82,412.22,612.22,781.93,244.13, 109.43,237.9
Education Fund
Total3,183.93,502.43,614.83,416.53,443.13,634.94,083.04,864.25,307.75,212.94,561.44,193.64,658.54,859.35,329.05,247.25,44 7.2
GF/EF
Total3,219.03,541.63,658.53,459.73,472.03,674.04,125.04,964.45,557.75,538.24,837.74,494.64,847.75,191.45,751.1 5,698.85,942.5
GF/EF & Earmarks
Motor Fuel Tax224.7237.6229.4237.9236.6239.9241.5240.4254.7250.7235.5243.3252.5253.0256.9256.3257.5
Special Fuel Tax73.776.680.684.484.586.293.8101.1111.1113.0101.294.4102.2104.1101.4101.2101.1
Other58.564.964.262.865.464.970.076.678.882.485.473.680.779.281.283.384.7
Total356.9379.0374.2385.1386.6391.0405.3418.1444.6446.0422.1411.4435.4436.2439.4440.8443.3
Transportation Fund
Payments31.539.657.936.553.174.892.0170.0160.9150.3189.1147.2152.8194.0136.9157.2161.7
Mineral Lease
TOTAL3,572.23,921.14,046.83,838.13,882.74,100.74,580.35,452.45,913.25,809.25,172.74,752.25,246.75,489.55,905.35,845.26,052.2
TOTAL & Eamarks3,607.33,960.34,090.53,881.33,911.74,139.84,622.35,552.66,163.26,134.65,449.05,053.25,435.95,821.66,327.46,296.8 6,547.5
Source: Governor’s Office of Manage ment and Budget f = forecast Revenue Source1999200020012002200320042005200620072008200920102011201220132014f2015f Sales and Use
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 23 Table
Fiscal
11
Year Reve nue Collections
Nominal Revenue ( Percent Chan g e )
Source200020012002200320042005200620072008200920102011201220132014f2015f Sales and Use
Tax4.0%4.5%0.7%0.2%4.0%8.8%10.5%2.9%-6.4%-11.0%-9.4%14.2%-1.2%2.1%2.5%3.6%
Tax11.711.5-1.1-33.035.17.3138.5149.630.1-15.18.9-37.275.627.17.09.7
Earmarked Sales and Use
Tax4.24.70.6-0.84.68.813.710.6-2.0-11.7-6.65.16.96.43.44.9
Total Sales and Use
Cable/Satellite Excise Tax 75.81.715.53.02.00.313.0-6.1-0.22.5 Liquor Profits6.35.67.7-2.518.61.124.212.512.20.0-2.26.813.614.95.87.4
Insurance Premiums9.3-11.823.14.25.87.96.00.57.67.5-3.6-5.211.26.13.13.7
Beer, Cigarette, and Tobacco-3.3-0.23.5-9.615.9-1.4-1.82.60.7-3.6-3.1113.8-0.1-3.6-2.4-0.9
Oil and Gas Severance Tax118.0127.3-52.041.637.145.933.7-8.50.18.4-20.86.59.5-18.924.75.4
Metal Severance Tax11.58.9-20.217.83.390.048.938.512.5-45.143.230.0-6.3-33.313.0-2.4
Tax683.7-53.5-68.6249.9-70.7-69.5152.3-93.3-80.9236.7-81.1113.8-100.00.00.00.0
Inheritance
Investment Income30.040.8-64.6-33.5-14.9147.1194.1108.7-24.8-60.1-78.8-55.0135.26.8-26.27.8
General Fund Other7.412.8-1.52.9-2.31.69.514.3-8.01.847.6-9.932.7-16.1-6.2-0.1
Credit-17.323.8-1.33.22.25.6-5.79.93.8-2.62.4-6.413.8-7.72.83.5
Property and Energy
Total8.73.5-2.11.73.69.813.04.7-5.5-10.6-7.914.91.50.42.53.3
General Fund
Total8.73.6-2.10.84.19.715.711.1-2.0-11.2-5.87.37.84.03.34.4
GF & Earmarks
Tax13.03.3-5.9-2.07.613.818.212.51.5-10.7-9.39.27.016.0-3.14.1
Individual Income
Withholding10.25.12.9-1.74.77.610.810.10.7-8.2-1.04.85.77.54.25.0FinalPayments18.1-0.1-18.7-3.713.327.235.521.16.7-21.7-18.59.02.933.8-23.05.0Refunds7.17.117.1-2.51.22.08.917.08.0-21.113.9-9.9-6.20.6-6.82.3
Corporate Taxes-3.7-5.5-30.531.41.229.179.613.0-2.2-36.91.20.93.125.8-13.84.5
Wittholding37.7109.2-32.0-45.7140.3-3.135.81.43.436.3-24.48.76.2-8.013.96.3
Mineral Production
Education Fund Other11.913.8-42.4-10.7-8.9-99.123,989.485.910.4-3.827.48.1-5.410.4-11.52.7
Education Fund Total11.23.0-8.5-0.17.514.724.612.71.0-13.8-8.28.36.516.6-4.24.1
Total10.03.2-5.50.85.612.319.19.1-1.8-12.5-8.111.14.39.7-1.53.8
GF/EF
Total10.03.3-5.40.45.812.320.312.0-0.4-12.6-7.17.97.110.8-0.94.3
GF/EF & Earmarks
Motor Fuel Tax5.7-3.43.7-0.51.40.6-0.45.9-1.6-6.13.33.80.21.5-0.20.5
Special Fuel Tax3.95.24.70.11.98.97.79.91.7-10.4-6.78.21.9-2.6-0.2-0.1 Other10.9-1.1-2.24.2-0.87.99.52.84.63.7-13.89.6-1.92.52.71.6
Total6.2-1.32.90.41.13.73.26.30.3-5.4-2.55.80.20.70.30.6
Transportation Fund
Payments25.746.0-36.945.640.923.084.8-5.4-6.525.8-22.23.827.0-29.414.82.9
Mineral Lease
TOTAL9.83.2-5.21.25.611.719.08.5-1.8-11.0-8.110.44.67.6-1.03.5
TOTAL & Eamarks9.83.3-5.10.85.811.720.111.0-0.5-11.2-7.37.67.18.7-0.54.0
Source: Governor’s Office of Manage ment and Budget f = forecast
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 24 Table 12 Percent Change in Fiscal Year Revenue Collections
Revenue
Industry Focus
Construction
The value of permit-authorized construction in Utah was estimated at $4.0 billion in 2013, nearly unchanged from 2012. This total value includes residential, nonresidential and additions, alterations and repairs. Residential construction continued to improve albeit at a slower pace than expected. Residential value in 2013 totaled $2.8 billion, a 7 percent increase over 2012. Offsetting this increase was the 34 percent decline in nonresidential construction valuation. In 2013 the value of permit-authorized new nonresidential construction dropped to $700 million. Additions, alterations and repairs added $575 million in construction value, bringing the combined value of permit-authorized construction to $4.0 billion. Residential activity accounted for 70 percent of permit-authorized value in 2013 and nonresidential activity stood at 17.5 percent. The remaining 12.5 percent included additions, alterations, and repairs.
2013 Summary
The most surprising developments for Utah’s construction industry in 2013 were the steep decline in multifamily con-
struction activity, particularly apartment units, and the continued weakness of the nonresidential market. Multifamily permits dropped by 41 percent, to 2,500 units in 2013. The market segment was hurt by the increase in interest rates in the late spring. Despite the decline in construction activity, market conditions remain very positive for new apartment development as vacancy rates have dropped to less than 4 percent and rental rates continue to increase. Consequently the decline in new construction activity is viewed as temporary.
The value of nonresidential construction dropped to its lowest value in 20 years. The value of office, industrial, and retail was down 38 percent in 2013.
2014 Outlook
Utah’s construction sector will expand in 2014 with valuation increasing by 18 percent to $4.8 billion. In 2014, multifamily construction should see some improvement with 3,000 new units, a 20 percent increase over 2013. The single-family mar-
Source: University of Utah, David Eccles School of Business, Bureau of Economic and Business
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 25
Research e = estimate f = forecast Figure 19
0 5,000 10,000 15,000 20,000 25,000 30,000 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014f Single-Family Units Multifamily Total
Utah Residential Construction Activity
ket will benefit from pent-up demand which should push new home construction to 11,000 units, an increase of 10 percent.
Nonresidential construction will see the greatest improvement as job growth and reduced vacancies in office, retail and industrial buildings spur new development. The value of nonresidential construction in 2014 is forecast to reach $1.1 billion.
Capital market conditions and commercial real estate market fundamentals will continue to improve, which will allow new projects to move forward. Generally speaking, the amount of
commercial square footage under construction is expected to remain at similar levels heading into 2014, with some upside potential.
Nonresidential construction starts will continue to be influenced by demand from tenants, geographic preferences and dynamic sectors of the Utah economy. As many large public sector projects reached completion in 2013, the most prominent project for the near-future will be the $2.3 billion Terminal Redevelopment Program at Salt Lake City International Airport (non-permit authorized) which will commence development in 2014.
Source: University of Utah, David Eccles School of Business, Bureau of Economic and Business Research e = estimates f = forecast
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 26
Figure 20
Value of New Construction
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014f Millions Residential Nonresidential Renovations Total
Table 13
Residential and Nonresidential Construction Activity
Value ofValue ofValue of Single-Multi-MobileResidentialNonresidentialAdd., Alt.,Total FamilyFamilyHomes/TotalConstructionConstructionand RepairsValuation YearUnitsUnitsCabinsUnits(millions)(millions)(millions)(millions)
19705,9623,108na9,070$117.0$87.3$18.0$222.3 19716,7686,009na12,777176.8121.623.9322.3 19728,8078,513na17,320256.599.031.8387.3 19737,5465,904na13,450240.9150.336.3427.5 19748,2843,217na11,501237.9174.252.3464.4 197510,9122,800na13,712330.6196.550.0577.1 197613,5465,075na18,621507.0216.849.4773.2 197717,4245,856na23,280728.0327.161.71,116.8 197815,6185,646na21,264734.0338.670.81,143.4 197912,5704,179na16,749645.8490.396.01,232.1 19807,7603,141na10,901408.3430.083.7922.0 19815,4133,840na9,253451.5378.2101.6931.3 19824,7672,904na7,671347.6440.1175.7963.4 19838,8065,858na14,664657.8321.0136.31,115.1 19847,49611,327na18,823786.7535.2172.91,494.8 19857,4037,844na15,247706.2567.7167.61,441.5 19868,5124,932na13,444715.5439.9164.11,319.5 19876,530755na7,305495.2413.4166.41,075.0 19885,297418na5,715413.0272.1161.5846.6 19895,197453na5,632447.8389.6171.11,008.5 19906,099910na7,009579.4422.9243.41,245.7 1991r7,9119585729,441791.0342.6186.91,320.5 199210,3751,72290413,0011,113.6396.9234.81,745.3 199312,9293,8651,01017,8041,504.4463.7337.32,305.4 199413,9474,6461,15419,7471,730.1772.2341.92,844.2 199513,9046,4251,22921,5581,854.6832.7409.03,096.3 199615,1397,1901,40823,7372,104.5951.8386.33,442.6 199714,0795,2651,34320,6871,943.51,370.9407.13,721.5 199814,4765,7621,50521,7432,188.71,148.4461.33,798.4 199914,5614,4431,34620,3502,238.01,195.0537.03,970.0 200013,4633,6291,06218,1542,140.11,213.0583.33,936.4 200113,8515,08973519,6752,352.7970.0562.83,885.5 200214,4664,14992619,9412,491.0897.0393.03,781.0 200316,5155,55576622,8363,046.41,017.4497.04,560.8 200417,7245,85371624,2933,552.61,089.9476.05,118.5 200520,9126,56281128,2854,662.61,217.8707.66,588.0 200619,8885,65877626,3224,955.51,588.0865.37,408.8 200713,5106,29073920,5393,963.22,051.0979.76,993.9 20085,5134,54454610,6031,877.01,919.1781.24,577.3 20095,2174,95132010,4881,674.01,054.3660.13,388.4 20105,9362,8902409,0661,667.0925.1672.03,264.1 20116,4543,568na10,0231,885.41,236.0652.03,773.4 20129,2224,248na13,4702,584.41,062.6504.84,151.8 2013e10,0002,500na12,5002,769.8700.0575.04,044.8 2014f11,0003,000na14,0003,100.01,100.0600.04,800.0
Source: University of Utah, David Eccles School of Business, Bureau of Economic and Business Research e = estimates f = forecast
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 27
Utah’s energy sector experienced some ups and downs during 2013. Crude oil production continued to rise as oil prices remained high; however, natural gas production peaked in 2012 and began to decline due to modest gas prices. Coal production in Utah decreased significantly in the last two years as demand for coal, especially out-of-state, remained low. Utah’s electricity consumption continued its upward trend, growing at 3.2 percent each year, while electric generation started to rebound from recession-related lows. Indications are that energy consumption in 2014 will continue to increase, while production will increase or remain nearly steady, thus maintaining the energy sector as a positive attribute in Utah’s still recovering economy.
plummet due to lower electricity demand and conversion of power and industrial plants to natural gas. Total coal production was roughly equal to total in-state demand. Electric generation in Utah rebounded from a recession-related drop, totaling 41,550 gigawatthours in 2013, while electricity consumption in Utah continued to rise, reaching a new record of 30,450 gigawatthours in 2013. Furthermore, electricity generation from coal and natural gas plants fluctuated with the economy in recent years and electricity from renewable resources more than doubled since 2008. This increase is attributed to the recent construction of the 306-MW Milford wind farm, as well as capacity increases at the Blundell geothermal power plant.
Total41,550
1Includes nonbiogenic municipal solid waste and other manufactured and waste gases derived from fossil fuels. 2Landfill gas, biogenic municipal solid waste, and solar.
Source: Utah Geological Survey, U.S. Energy Information Administration e = estimate
Production and Consumption. Despite a 150 percent increase in crude oil production over the last ten years, and 2013 production totaling approximately 33.0 million barrels, Utah continued to be dependent on other states and Canada for crude oil and petroleum products as Utah production only met 60 percent of in-state demand. Conversely, Utah continued to produce much more natural gas than it consumed (462 billion cubic feet produced in 2013 compared to 228 billion cubic feet consumed), allowing nearly half of total production to be exported out-of -state. Utah coal production decreased significantly in 2013 to 16.3 million tons as demand for coal continued to
Prices. Utah’s crude oil price rose 4 percent to an average of $86 per barrel in 2013, the second highest price in nominal dollars, helping spur continued growth in crude oil development. Utah’s price for natural gas averaged only $3.58 per thousand cubic feet over the last five years. Consequently, natural gas production peaked in 2012 and began a downward trend. The minemouth price of coal was holding steady near $36 per ton, but low demand was hampering production. With regard to electricity, Utah’s well-established coal-fired power plants will assure affordable, reliable electric power for the foreseeable future and help keep Utah’s electricity prices well below the national average.
2014 Outlook
In 2014, Utah crude oil production should continue its recent growth as prices are expected to remain over $80 per barrel. Utah coal production will remain in the 16 million ton range, as prospects for increasing demand are low. Natural gas production, having peaked in 2012, is expected to decline slightly in the following few years, at least until prices climb back to the $4 to $5 per thousand cubic foot range. Electricity generation in Utah has begun to rebound from a recession-related dip and will continue a slow climb as demand returns. As the economy grows, consumption of energy from all sources is expected to increase in 2014, while prices remain near 2013 averages. As always, future predictions are subject to change due to unforeseen socio-political and economic events.
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 28
Energy
Table 14
Electric Generation in Utah: 2013e
Percent SourceGWhof Total Coal33,50080.6% Natural Gas5,90014.2% Hydroelectric9702.3% Wind5501.3% Geothermal3100.7% Other1 2200.5% Other Renewables2 600.1% Petroleum400.1%
198024,97935,98319.7947,857115,0921.1213,2367,10625.6311,29182112,11210,7055.5 198124,30930,81234.1459,120102,2401.1013,8087,43326.8711,13962311,76211,8866.0 198223,59530,56330.5049,995117,7063.0616,9126,78729.4210,8671,02411,89112,3916.3 198331,04532,31628.1220,925110,1853.4011,8296,87228.3211,0301,39412,42413,1946.9 198438,05432,10127.2174,698115,5784.0812,2597,90529.2012,3591,42913,78812,7177.4 198541,08031,80923.9883,405115,1173.5212,8318,30327.6914,2831,12915,41213,0397.8 198639,24334,40613.3390,013105,1752.9014,2698,11227.6415,2351,58416,81912,9898.0 198735,82935,17217.2287,15898,9871.8816,52111,80625.6725,3261,02026,34613,3988.0 198833,36535,97114.24101,372108,9532.3918,16414,51322.8528,87076729,63714,5077.8 198928,50434,69418.63120,089113,5371.5820,51715,04422.0129,76173530,49614,9657.4 199027,70535,08222.61145,875116,6481.7022,01215,73721.7831,90366032,56415,4027.1 199125,92836,93319.99144,817132,7661.5421,87514,83421.5629,69381330,50615,9077.1 199224,07436,52419.39171,293122,7851.6321,01515,71921.8332,44883633,28416,5677.0 199321,82637,42217.48225,401138,1991.7721,72316,06321.1733,0501,04734,09716,8676.9 199420,66838,27516.38270,858137,2221.5424,42216,60320.0734,25298335,23517,8476.9 199519,97641,71817.71241,290156,9711.1525,05115,67519.1131,6991,13732,83618,4606.9 199619,52944,62821.10250,767161,2851.3927,07115,61618.5031,7111,27232,98319,8587.0 199719,59344,52918.57257,139165,3051.8626,42816,50618.3433,2001,54734,74720,3766.9 199819,21845,45212.52277,340170,1341.7326,60017,48217.8334,4361,50935,94520,7006.8 199916,36246,80617.69262,614160,4311.9326,49116,61017.3635,3661,44936,81521,8796.3 200015,60949,17928.53269,285165,0233.2826,92017,37316.9335,69794236,63923,1856.3 200115,26948,16724.09283,913159,2993.5227,02416,74817.7635,18770035,88723,2176.7 200213,77147,60723.87274,739163,3791.9925,29916,43418.2035,92668236,60823,2676.8 200313,09749,89728.88268,058154,1254.1123,06916,97416.3637,39962538,02423,8606.9 200414,74450,62539.35277,969155,8915.2421,81817,61516.8237,56364938,21224,5127.2 200516,68152,97853.98301,223160,2767.1624,55617,32918.7137,19297338,16525,0007.5 200617,92956,86359.70348,320187,3995.7026,13117,51521.7740,31195241,26326,3667.6 200719,53755,55062.48376,409219,6993.8624,28817,48624.7544,63973445,37327,7858.2 200822,04152,95586.58433,566224,1876.1524,27517,77927.7045,60997046,57928,1928.3 200922,87249,55350.22444,162214,2203.3821,92716,64731.2142,2211,32243,54327,5878.5 201024,66949,42068.09432,045219,1784.2319,40615,97630.8940,7731,47642,24928,0448.7 201126,28453,07282.53457,525222,1653.9020,07315,58832.8938,6452,19140,83628,8599.0 201230,19054,56882.73485,527217,3572.7517,15514,08535.7837,5551,84839,40329,7239.9 2013e33,00054,94986.00462,000227,8553.6516,30015,94335.9839,6601,89041,55030,45010.5 2014f34,70055,50083.50458,000228,0003.8516,50016,20036.0040,5002,00042,50031,30011.0
e = estimate
f = forecast
1 Includes nonbio g enic munici p al solid waste and other manufactured and waste g ases derived from fossil fuels
2 Includes h y droelectric, g eothermal, biomass, wind, and solar
Note: Prices are in nominal dollars
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 29 Table
Production, Consumption, and Selected Prices for Energy
in Utah
Utah Geological Survey, U.S. Energy Information Administration, Utah Division of Oil, Gas, and Mining YearProductionConsumption Wellhead Price Marketed Production Consumption Wellhead Price ProductionConsumption Minemouth Price Generation from Fossil Fuels 1 Generation from Renewables 2 Total Generation Consumption Residential Electricity Price Thousand barrels Thousand barrels $/barrel Million cubic feet Million cubic feet $/thousand cubic feet Thousand tons T housand tons
15
Sources
Source:
$/tonGWhGWhGWhGWh¢/kWh
Electricit
y Crude Oil and Petroleum ProductsNatural GasCoal
The Utah Geological Survey (UGS) estimates the gross production value of nonfuel mineral commodities and uranium produced in Utah in 2013 totaled $3.77 billion, an increase of about $279 million over 2012. The U.S. Geological Survey reports the 2012 value of Utah’s nonfuel minerals ranks seventh nationally with 4.6 percent of the total production. The 2013 data was derived primarily from corporate third quarter reports, 2013 corporate production projections reported in late 2012, and other sources where available.
2013 Summary
The estimated $3.77 billion total value of mineral industry sectors includes a base metals value of $2.22 billion (59 percent), an industrial minerals value of $1.19 billion (31 percent), and a precious metals value of $362 million (10 percent) Of the nonfuel mineral-producing companies surveyed in late 2012, 43 percent of them projected duplicating 2012 production in 2013, 37 percent planned on some production increase, and 20 percent projected less production.
The April 2013 Manefay landslide at Kennecott Utah Copper’s (KUC) Bingham Canyon open pit copper-goldmolybdenum-silver mine had a negative impact on Utah’s nonfuel mineral production value for 2013 because of the company’s large share of the total Utah production value. The massive landslide moved approximately 132 million metric tons of rock and dirt from the northeast highwall into the bottom of the mine. In addition to lower production, commodity prices in 2013 were generally down from 2012 levels.
However, because 2012 was a poor year for the Bingham Canyon mine, the total value of the 2013 production was essentially unchanged.
Low uranium prices resulted in a halt to all production from Energy Fuels’ uranium mining operations in Utah in early 2013, which also resulted in the loss of byproduct vanadium production. Nonfuel mineral exploration activities in Utah were lower in 2013 than the previous year. However, both iron ore production and prices were up. Industrial minerals production was estimated to remain stable in 2013.
2014 Outlook
While base and precious metal production are likely to be unchanged in 2014, metal prices are expected to decrease slightly from 2013, resulting in somewhat lower 2014 metals production value. A number of large construction projects in the state were completed or were projected to be completed in 2013. Smaller-scale construction projects will likely continue near 2013 levels. Potash, the highest industrial mineral value contributor in 2012, saw prices decrease marginally in 2013. Potash prices are likely to remain fairly stable in 2014, but recent industry developments have led to uncertainty in the market. Consequently, the UGS tentatively estimates that industrial mineral values in 2014 will not fluctuate significantly from 2013. Therefore, the relative stability in production and price for most nonfuel mineral commodities forecast for 2014 suggests that the overall value will be only slightly below 2013 values.
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 30
Minerals
Figure 21
Source: U.S. Geological Survey; estimate by the Utah Geological Survey e = estimate 1.29 1.43 1.36 1.24 1.35 1.94 2.79 3.96 3.88 4.16 3.90 4.38 4.30 3.49 3.77 0 1 2 3 4 5 199920002001200220032004200520062007200820092010201120122013e Billions of Dollars
Total Annual Value of Utah’s Nonfuel Mineral Production
Utah’s tourism, travel, and recreation sector was heading for another successful year in 2013, but will more than likely fall slightly short of the revenue and visitation levels in 2012 due to the government shutdown in October. Even though 2013 was still a good year for tourism, it was unclear what the short term effect of the shutdown will be on final estimates.
2013 Summary
Utah’s travel and tourism sector was on pace to surpass the success of 2012 and as of September 2013, national parks, national monument and recreation areas, and state parks were on track to produce slight increases over 2012 visitation. Tourism- travel- and recreation-related taxes, statewide hotel occupancy rates, and welcome center visitation were also ahead of the September 2012 figures.
National park visitation for the month of October was down 33 percent due to the federal government shutdown which began on October 1, 2013. During the shutdown, Utah state parks accepted national park visitor passes, which was estimated to have positively impacted October state park visitation. Governor Herbert, working with the U.S. Department of the Interior, led the effort to re-open the national parks
with temporary state funding. “Utah’s national parks are the backbone of many rural economies,” Herbert said, “and hardworking Utahns are paying a heavy price for this shutdown.” Due to Herbert’s efforts, Utah’s national parks re-opened October 12, 2013.
The 2012/13 ski season was a success despite below average snowfall. Utah skier visits were up 5.4 percent, from 3.8 million during the 2011/12 season to 4.0 million during the 2012/13 season. Domestically, the largest number of out-ofstate visitors were from New York City, Los Angeles, Boston, Atlanta, and Chicago. Top international-visitor markets included Australia, Canada, Germany, the United Kingdom, and Mexico. Resident and nonresident ski/snowboard visitors spent an estimated $1.29 billion, up from $1.17 billion in 2011/12. Major ski publications favorably ranked Utah ski resorts in 2013 and the resorts continue to make yearly infrastructure improvements.
Utah weathered the Great Recession better than most states and has enjoyed a sustained recovery. Overall, spending by travelers and tourists has been steadily increasing, as have tourism- travel- and recreation-related jobs, taxes, and overall
BUREAU OF ECONOMIC AND BUSINESS RESEARCH 2014 Utah Economic Outlook 31
Tourism
Figure 22
Total Utah Skier Visits
2.8 2.6 2.8 2.8 3.1 3.0 3.0 3.1 3.1 3.0 3.3 3.0 3.1 3.4 3.9 4.1 4.1 4.2 4.0 4.0 4.2 3.8 4.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Source: Ski Utah
Utah visitation. With the construction of several new highend resorts in recent years, Utah is experiencing an increase in luxury travel as well.
2014 Outlook
The outlook for 2014 is cautiously optimistic. Despite factors such as the national government shutdown in October, a stagnant national economy, and tepid consumer confidence, Utah’s tourism, travel, and recreation sector is expected to show a modest increase. Predictions include slow but steady growth in international, in-state, and domestic leisure travel.
Additionally, travelers continue to show strong interest in national parks, from which Utah should benefit. Competition among nearby destinations for the local and regional markets will continue to intensify. National trends highlight opportunities in key segments of the travel market including adventure travel, cultural and heritage tourism, nature-based travel, and family travel. Utah is well positioned to attract these visitors. Several of Utah’s resorts again received high rankings from major ski publications and hope to surpass the 2012/13 season.
DAVID ECCLES SCHOOL OF BUSINESS 2014 Utah Economic Outlook 32
Figure 23
Utah Total Tourism/Traveler Spending
$4.3 $4.3 $4.7 $4.6 $5.6 $5.7 $5.9 $6.7 $6.9 $6.2 $6.5 $6.8 $7.4 $7.8 $8.2 0 1 2 3 4 5 6 7 8 9 20002001200220032004200520062007200820092010201120122013e2014f Billions of Dollars
Source: D.K. Shifflet & Associates Ltd.
