Utah economy on the road to recovery-President's message

Utah's economy is currently facing challenges, but the state is well-positioned for an economic recovery. That was the message of the director of the University of Utah's Bureau of Economic and Business Research in a presentation to Utah Realtors on Tuesday.

        "Utah's fundamentals are still in place," said James Wood. "Once growth resumes, Utah will outperform most states."
       

Among those fundamentals are

1) The state government's fiscal responsibility
2) The state's transportation infrastructure
3) Population growth
4) Quality of life and
5) A quality and cost-effective workforce
       

Wood says Utah's recovery will coincide with that of the U.S. as a whole, which is why it is encouraging to see recent reports of positive national news. Increases in existing home sales, new home starts, productivity and retail sales are just a few of the positive headlines that have been in the news recently. Even Federal Reserve Chairman Ben Bernanke said "the recession has likely ended."
       

The Case-Shiller Index, which measures home prices in major U.S. metro areas, has also been up for the past three months. Although the data does not include Utah prices, the positive news should help the U.S. economy, in turn helping our local economic conditions.
       

"We need good national numbers to help our employment numbers here," Wood said.
       

Although employment is one of the last indicators to pick up, real estate, which is a leading indicator, appears to be seeing improvements. In the spring, the 38-month decline in home building ended as well as the 27-month drop in existing home sales in the four Wasatch Front counties and Tooele.
       

"I think we have established a bottom," Wood said.
        

Of course, there are still challenges that will keep economic growth tepid for the next 18 months, he said. That's because the U.S. financial system is still damaged, consumers are continuing to cut back, and the federal and state fiscal stimulus impacts will begin to fade in early 2010.
       

"The private sector must be a driver of a self-sustaining economic recovery," he said.
       

At the end of his presentation, Wood encouraged attendees to maintain a positive perspective and to remember that 1.2 million people go to work every day in our state, and our unemployment rate is only about 6 percent compared to the nearly 10 percent nationally.
       

Also attending the same meeting was Utah Gov. Gary Herbert who reiterated his inaugural speech, saying his No. 1 priority is getting the economy moving. Like for real estate practitioners who repeat the phrase "location, location, location," Herbert said his mantra is "jobs, jobs, jobs."
       

"My prediction is Utah will come out of this better than most," Herbert said, quoting a study from the American Legislative Exchange that said Utah will be the first state to come out of the recession. "Even with today's down economy, we've got in-migration coming to Utah," and the state's other economic fundamentals still remain in tact.
       

Herbert's plan for economic growth focuses on protecting Utah jobs, fostering entrepreneurial growth and recruiting companies to bring their businesses to the state. And he has assembled a "dream team" of economic development, including Spencer Eccles, Josh Romney and Derek Miller, to help him do just that.
       

"What we need to do is be proactive," Herbert said. "I can do something about Utah, and my focus is that Utah can survive the storms that are out there."

Published Monday, October 12, 2009 6:39 AM by Chris & Berna Sloan