Utah’s rising exports and the need for more FTAs

Tuesday, May 15th, 2012

The constant bright spot in a tough economy, Utah exports continued to grow through the first part of 2012.

Utah’s first quarter exports (Jan-March 2012) totaled $5.17 billion—a 22 percent increase from the first quarter of 2011, which saw $4.25 billion in exports.

World Trade Center Utah President and CEO Lew Cramer says this growth is heading forward at a “blistering pace,” setting Utah up to have over $20 billion in total exports for the whole year.

International exports are a big component in the Utah Jobs Agenda, a 10-point plan to create 150,000 jobs in five years. And those billions of dollars in exports translate into more support for both new and existing Utah jobs.

Another bit of good news today is that a Free Trade Agreement between the U.S. and Colombia has now come to fruition. This agreement is expected to increase U.S. GDP by nearly $2.5 billion and U.S. merchandise exports by $1.1 billion.

Free Enterprise from the U.S. Chamber of Commerce notes that “more than 95 percent of the world’s consumers live outside our borders and their demand for American goods and services is growing every day.”

This is why it’s important for all businesses to look into exports and how they can optimize their efforts outside the boundaries of the U.S. You may not think your business has anything worth exporting, but odds are, it does.

The issue that remains is that exports need a monumental kick in order for the U.S. to really see growth and more jobs from it. It’s not just large businesses that can export—any business can become involved, even small firms. If your business needs help entering profitable global markets, contact the World Trade Center Utah.

Posted in Economic Development, International Business, Utah Jobs Agenda, World Trade Center Utah | No Comments »

Unemployment rate drops, but it’s not all good news

Friday, May 4th, 2012

While the national unemployment rate dropped slightly this morning, there is reason for concern. For every new job created in April, three people dropped out of the workforce.

The unemployment rate is calculated by the number of Americans actively looking for work that cannot find a job. Last month, the U.S. economy added 115,000 jobs while 342,000 Americans dropped out of the work force. The labor force participation rate has now dropped to its lowest level since 1981.

“We’re in uncharted waters,” said Natalie Gochnour, chief economist of the Salt Lake Chamber. “Economies are complicated, but a recovery from the kind of downturn we’ve been through are even more complicated.”

The unemployment number is an important statistic but it can be misleading. Generally, a decrease in unemployment is a good thing, but not if you get there by cutting the number of people with enough hope of finding a job to actively look for one. These numbers put the economy back at the forefront of the national conversation.

“Today’s jobs report reinforces the economy as the general election’s primary issue,” said Darin Mellott, a member of the Salt Lake Chamber’s Utah Economic Council.

“The most important thing business leaders can do is demand smart economic leadership from our elected officials,” said Gochnour.

There are some silver linings in the jobs report. The U.S. economy continues to move in the positive direction–just at a slower rate than we would like. In all, 1.18 million new jobs have been added in the past six months.

Moody’s released a report saying “The softening in U.S. unemployment is temporary; hiring will speed up again later this year.”

Utah’s most recent employment figures show an unemployment rate of 5.8 percent, well over two points below the national rate. The state economy is also growing at a higher rate than the nation as a whole.

Posted in Economic Development | No Comments »

U.S. now has highest corporate tax rate in the world

Wednesday, April 25th, 2012

The United States recently took over a No. 1 ranking we’d rather not have.

Japan’s corporate tax rate dropped at the beginning of this month, meaning the U.S. now officially taxes corporations at the highest rate in the world–35 percent.

This week, Natalie Gochnour, the Chamber’s chief economist told the Board of Governors how closely tied the Utah economy is to the U.S. economy. She showed the chart indicating the similarity in Utah’s economic peaks and troughs and those of the nation as a whole.

Yes, our unemployment rate is and has been lower than the nation’s. And yes, we are growing at a faster pace. But over the long run, we cannot be successful alone. A corporate tax that drives business away from America does economic harm to Utah.

The Salt Lake Chamber joined the U.S. Chamber and dozens of other chambers of commerce and business associations representing thousands of businesses across the country in favor of the “Tax Hike Prevention and Business Certainty Act” (S. 1647 and H.R. 3091).

Unless Congress acts by the end of 2012, the tax rate for capital gains will increase from 15 percent to 20 percent and the dividend tax rate will more than double from 15 percent to 39.6 percent. In addition, beginning in 2013 investment income will be subject to an additional Medicare Hospital Insurance (HI) tax of 3.8 percent, raising the top rate on capital gains to 23.8 percent and on dividend income to 43.4 percent, resulting in one of the largest tax increases in U.S. history.

A tax increase of this size will have significant impact, discouraging capital investment needed for economic growth and job creation, giving companies an incentive to use excessive debt financing and potentially reducing the value of dividend-paying stocks. Any of these outcomes would hurt Americans at all income levels, and especially retirees, many of whom rely on investment income as a supplement to their retirement.

This looming tax increase presents businesses and individuals with uncertainty and great complexity in the short-term. Looking ahead, comprehensive fundamental tax reform could result in giving taxpayers more certainty, simplicity and fairness, while encouraging economic growth and job creation. In the interim, Congress must act to maintain the current tax rates on capital gains and dividend income and give businesses and individual investors the certainty that they need to support economic growth and job creation.

The Salt Lake Chamber works to cultivate an environment that allows businesses to grow and prosper. Low taxes, reasonable regulations, top-notch infrastructure, a great workforce along with a well-managed and limited government create the environment for economic success.

Posted in Chamber News, Economic Development, Economic Development | No Comments »

Chamber supports interconnection of Utah resorts

Tuesday, April 24th, 2012

This morning the Salt Lake Chamber reaffirmed it support for the interconnection of the world-class ski resorts that boast the Greatest Snow on Earth.

Chamber President and CEO Lane Beattie has agreed to co-chair the Lift Utah coalition, a group that will develop the best path forward to protect Utah’s unsurpassed natural environment while advancing Utah’s ski industry.

You can read the Chamber’s statement as well as Lane Beattie’s comments from the news conference this morning.

For 125 years the Chamber has been a place where groups with differing opinions have come together to find the best path forward. We’re proud to play that role again.

—

LIFT UTAH COALITION
Remarks delivered by Lane Beattie, president and CEO of the Salt Lake Chamber, at the news conference launching Lift Utah, a group he co-chairs with Former Senator Jake Garn and Sandy Mayor Tom Dolan.

Good morning. Thank you for joining us today at the Salt Lake Chamber offices. I want to thank Senator Garn, Mayor Dolan and other community leaders for being here today as we express our collective support for Utah’s ski and snowboard industry and the interconnection of several of our world class ski resorts.

Yesterday the Salt Lake Chamber marked our 125th anniversary. Since 1887 we have worked to achieve common ground for the common good. The Salt Lake Chamber is hosting this event, in part, because of our long history of convening community leaders for the betterment of this city and state.

Whether it is mining copper in the Oquirrh Mountains, championing air quality in Salt Lake Valley, investing in TRAX light rail and FrontRunner commuter rail, recruiting the Utah Jazz, building a convention center, expanding the Salt Lake airport, supporting the Utah Symphony and Opera, … or, in the case of today, connecting ski resorts, we work with others to champion community prosperity.

Given all of the tough issues we’ve gotten involved in over our history, I’ve even considered placing a sign in our boardroom that says, “Chambers do hard things!”

We’ve found over the years that when people come together and work on the hard things, the community benefits. Progress starts with coalitions of community-minded people working together.

The Salt Lake Chamber’s involvement with the Utah ski industry stretches all the way back to the Great Depression. It was a challenging time. Many business leaders desired to grow the Utah economy by positioning Salt Lake City as a winter headquarters for the Western States.

In 1937 business leaders formed the Salt Lake Winter Sports Association with the goal of establishing Utah’s first ski area. Business leaders raised $10,000 to build a ski lift at Alta, the nation’s second chair lift.

For 15 cents a ride or $1.50 a day, skiers could be carried 2,630 feet up the mountain. Skiing in Utah was born.

Today we face a far different challenge. This initial investment has paid off. Utah’s ski and snowboard opportunities are arguably the finest in the world. Our high altitude, paper-dry powder, variety of terrain and accessibility to an international airport are unrivaled.

And we have the opportunity to make it even better.

By connecting the Salt Lake and Summit County resorts we can create a unique ski experience unmatched by any in North America.

We can carefully develop Utah’s ski and snowboard industry from a $1.2 billion economic asset to something that will pay even greater dividends to Utahns in the form of jobs and income for residents.

We can enhance the already best skiing experience in America and use it to attract new business to Utah.

We can secure our future as the United States’ winter sports capital, and potentially host another Olympic Winter Games.

And, we can take cars off the road and create a net positive impact on our environment.

But, we have to do it right.

That is why I agreed to co-chair the Lift Utah Coalition. The Salt Lake Chamber supports the SkiLink proposal, but only if it meets well-defined criteria.

First, SkiLink must be a net positive for the environment. The Salt Lake Chamber and our members care deeply about the Wasatch Mountains. They are paramount to the Greater Salt Lake area’s watershed and natural beauty. We depend on them for recreation and solace. We also value clean air and the transportation benefits SkiLink will bring. The Salt Lake Chamber will not, and I personally will not, support any actions in the Wasatch Canyons that detract from these values.

Second, SkiLink must pass the scrutiny of the local review of Salt Lake and Summit Counties. Much of these lands are in the public domain. Extensive local review, including public hearings, must occur. I expect there will be strong feelings by both proponents and opponents. Process matters and SkiLink should have careful public review.

You will hear today that SkiLink is a first step to a new interconnected ski experience. It’s time that we as a community consider options, weigh the benefits and costs, and make decisions about how to proceed. Connecting the ski resorts can be done in an economically and environmentally responsible manner.

I’m honored to co-chair this effort and represent the members of the Salt Lake Chamber in our collective interest to develop the Utah ski industry, protect our natural environment and represent the interests of so many great people who call this state home.

Thank you.

Posted in Chamber News, Economic Development | No Comments »

JOBS Act a Shot of Adrenaline to U.S. Economy

Friday, April 13th, 2012

Editors Note: This article originally appeared on FreeEnterprise.com on April 5, 2012.

Last week, the president signed the JOBS Act. As this bill made its way through Congress and to the President’s desk, thousands of business owners—and aspiring business owners—from all across the country watched the votes and posturing closer than their March Madness brackets.

Passing the JOBS Act loosens the restrictions on investors and puts more capital into the market for start-ups to take hold and for businesses to expand and create jobs.

Donald Tarinelli and Chris Bybee are two young business owners paying close attention to process. In 2009, fresh out of college, they took their first shot at starting a business. They opened a Belgian Waffle shop in their local mall, then closed less than a year later when the economy went south and they learned the hard way the vast majority of Americans think of waffles as a breakfast food, not a dessert.

“To put it nicely, it was a real learning experience,” says Tarinelli. “We learned a lot of lessons—especially how important capital is to a new business and how challenging it can be to raise it.”

Back in the game, Tarinelli and Bybee are now starting a new business, AngelFunder, a venture helping businesses and other groups raise capital of their own. It’s a challenge made much more manageable with the passage of the JOBS Act because AngelFunder, and thousands of start-ups like it, can now raise money by selling equity with fewer regulations and without going public.

The keyword is crowdfunding.

Crowdfunding provisions of the JOBS Act allow small business to solicit modest investments from a larger group of people. Before the JOBS Act was signed into law, private companies could not solicit the sale of their equity.  There were also limits to the amount of private shareholders a business could have (fewer than 500).

The new law will allow existing businesses and startups to raise up to $1 million, and existing businesses with two years of audited financials can raise up to $2 million. The more significant change raises the investor cap from 500 to 2,000.

Think of it this way: by eliminating the cap on the number of private investors, a business can solicit smaller amounts of money from a larger pool of potential investors, injecting money that was sitting on the sidelines in smaller amounts ($50, $100 or $500 compared to $10,000, $20,000 or $50,000). A business that needs to raise $100,000 could do it with 2,000 investments of just $50.

“Small businesses power the U.S. economy,” said Todd Bremmer, CEO of RedMetal, a Boston based group that serves as a business incubator. “For companies like ours, the JOBS Act provides a much needed shot in the arm.”

The changes will make a big difference for Robert Vanech. He’s working to start the Woodstock School of Music, a two-year education program for college-age students.

“The ability to tell our fan base that we are raising capital and let them be contributors to the process is amazing,” says Vanech. “We have very passionate followers and this allows us to let them have a piece of the business that they love.”

Under the old law, generating capital via crowdsourcing was both impractical and illegal.

Changes in the way people and businesses communicate made the JOBS Act more necessary and beneficial. The ability to solicit investment through mass emails, blogs, Facebook, Twitter and YouTube, changes the game.

The changes in regulations also benefit venture capitalists. As more people can invest modest amounts of money to launch and grow businesses, the pool of potential businesses looking for professional venture capital will ultimately increase.

“There is a lot of capital on the sidelines in the hands of everyday Americans,” said David Drake, founder of LDJ Capital in New York City and co-founder of TSLCC (The Soho Loft Capital Creation Events). “Social media now allows us to reach these newly entitled investors instantly. Crowd-investing has the potential to flood our small businesses with investment opportunities.”

Opening the gates to this new form of crowd-investing is ideal for small business and startups which are the heart-beat of our economy. Facebook’s first round of capital investment was $500,000. There weren’t a lot of people who could chip in the kind of cash needed to launch what eventually became one of the most successful IPOs ever.

Facebook is now valued between $80 and $100 billion. Think how much wealth could have been created on for people Main Street if the tens of thousands of users on Facebook would have been allowed to invest even $100 towards the $500k. And how many other business ideas have failed because they couldn’t raise capital under the old laws?

Changes in the crowdfunding regulations could increase the number of startups by 10 percent, according to a recent study by Regional Economic Models, Inc. (REMI). More available capital means more startups get to battle the marketplace without the government tying one hand behind their backs.

More new businesses mean more new ideas and products on the market and ultimately more jobs.

Posted in Economic Development, Economic Development, Public Policy | No Comments »

New homebuyer mortgage assistance to help boost economy

Monday, April 9th, 2012

As the nation slipped into the Great Recession, we often said, “housing got us into this mess and housing will get us out.” For Utah, the housing sector is beginning to see some light at the end of the tunnel.

The Utah Housing Corporation and Gov. Gary Herbert recently announced two new mortgage options to help buyers who need down payment assistance or have credit scores of at least 620—even if they have previously owned a home.

“These new Utah Housing Corporation mortgages are critical tools in Utah’s economic recovery,” said the governor. “I am encouraged that more Utahns will now have that opportunity. This helps families and builds our economy.  We are fortunate to have one of the leading housing finance agencies in the country at the forefront of mortgage innovation.”

The residential construction sector of Utah’s economy lost nearly 20,000 jobs during the economic downturn. In January 2012, home sales reached their highest levels in five years.

While this is still a buyer’s market, many people still need down payment assistance, even if they have previously owned a home.

Who the loans will help
The HomeAgain Loan is one of the only available down payment assistance loans available for mortgages of previous homebuyers. The Score Loan provides down payment assistance for buyers with credit scores as low as 620.

The Salt Lake Chamber’s Chief Economist Natalie Gouchner says a growing housing sector could be the final push Utah needs to restore its economic stability.

It’s anticipated that Utah Housing Corporation HomeAgain and Score Loans will bring thousands of homebuyers back into the market—which is a positive factor in boosting Utah’s economic recovery as it means more homes can be built and more jobs can be supported.

To learn more about Utah Housing Corporation down payment assistance mortgages, visit www.UtahHousingCorp.org.

Posted in Economic Development | No Comments »

Metro areas driving national export growth

Wednesday, March 28th, 2012

The Utah Jobs Agenda is a 10-point, private sector plan to create 150,000 jobs over five years. One of the key components of the Agenda is to grow is to double the value of international merchandise exports during that time period.

Utah has been a leader in export growth—increasing exports by 142 percent in the past five years, reaching our all-time high of over $18 billion last year.

Utah exports create high paying Utah jobs.

The Brookings Institute recently found exports have played a major role in driving the U.S. economy forward in the past two years, contributing to more than 46 percent of the nation’s growth in 2010. In fact, total exports that year almost reached pre-recession levels.

Export Nation highlights that metropolitan areas contributed to 84 percent of the nation’s exports while the top 100 metros accounted for 65 percent of U.S. goods and services sold abroad. All large metro areas also experienced positive export growth rates between 2009 and 2010. Exporting is now being looked at as mostly a metropolitan enterprise.

Brookings says exports supported 600,000 new export-related jobs and 10.7 million jobs altogether in 2010. Of those, large metropolitan exports supported over 67 percent of export-production jobs even beyond the metro boundaries. New York was the biggest metro exporter to support the largest amount of jobs (329,000) with Los Angeles following close behind.

Of the largest 100 metro areas, 11 achieved export growth sufficient enough to meet the nation’s goal of doubling exports. It may seem a small number, but it’s double the number of metros that had this kind of growth rate between 2003 and 2008.

Utah was among states where metropolitan area exports account for over 60 percent of the export total for the state. Others include California, Washington, Oregon, Texas, New York, Florida, Pennsylvania along with several others mostly along the eastern seaboard.

Utah has led the U.S. in merchandise export growth for the past three years with 39.5 percent growth, jumping from $13.8 billion in 2010 to $18.93 billion in 2011.

U.S. exports to developing countries are increasing and metropolitan areas that produce what those emerging markets need are in a good position to take advantage of the growth opportunities. World Bank works with sponsors nationwide to help get those products to development projects in those nations—thus helping the U.S. export numbers. As a Private Sector Liaison Officer, the Chamber helps Utah businesses procure contracts for projects funded by the World Bank.

Selling products to customers outside the U.S. can bring a big boost to businesses of all sizes.

Posted in Economic Development, Economic Development, International Business, Utah Jobs Agenda | No Comments »

City Creek Center opens in Downtown Salt Lake City

Thursday, March 22nd, 2012

Editor’s note: These are prepared remarks delivered by Salt Lake Chamber President and CEO Lane Beattie at the opening of the City Creek Center.

This is a day of gratitude for Downtown Rising. And on behalf of Utah’s business community we say thank you.

Thank you to our friends at Taubman and City Creek Reserve for their vision, leadership and investment in this stunning new heart for our capital city.

Thank you to the thousands of worker who have labored so diligently to prepare for this day.

Thank you to the residents, retailers, restaurants and renters who will make this center come to life, and by extension, breathe new life into the rest of our capital city.

The impact of City Creek Center extends far beyond these two blocks.

You see it in the confidence of Hamilton Partners who built 222 South Main because they saw what was happening here, and knew that this is a city on the rise.

You see it in the new OC Tanner flagship store across State Street.

You see it in the new businesses streaming into Main Street, the Broadway District, along 100 South and at The Gateway.

This truly is a city on the rise.

And this rising tide extends beyond Salt Lake City.

You see it throughout the region – a sense of optimism and hope for the future, all inspired by this rising urban center.

And you see it in our future:  with plans for a performing arts center, privately-led convention hotel, public market, film and media center, new residences and new office towers all in the works.

All contributing to the growth of Utah’s capital city and the economic strength of the entire region.

We can see today, there is no limit to what we can achieve.

Success has a thousand authors, and so to the thousands who have worked so hard to make this day a reality we say thank you.

Today doesn’t mark the end, but a new chapter in the storey of this great American city, our capital city, in the heart of the new American West.

Today we celebrate a downtown on the rise.

Posted in Chamber News, Downtown Alliance, Downtown Rising, Economic Development | 1 Comment »

Home sales continue to rise in Utah

Thursday, March 8th, 2012

When the economy started the nasty downward spiral in the summer of 2008, the hardest-hit sector was residential construction, which lost around 20,000 jobs.

Nearly three years after the official end of the Great Recession, there could be a turn in the real estate tides that will affect residential construction.

A new report by the Utah Association of Realtors revealed that January home sales were at their highest level since 2007. Utah home sales have risen each of the past eight months.

Home sales have increased over six percent in the past year, an increase of 120 homes over the previous year. That increase was 30 percent in Salt Lake real estate transactions alone. Many Utah counties saw an increase in closed sales—with Duchesne seeing the biggest boost with nearly 86 percent.

“The success of real estate can be a real indicator that our state economy is heading in the right direction,” said Lane Beattie, president and CEO of the Salt Lake Chamber. “Real estate and residential construction were the first to suffer with the recession so for it to make a comeback is significant.”

Another good sign is that the inventory of houses for sale has decined 24 percent from last year. Right now, inventory is at its lowest point since February 2007. The rise in home sales and the decline in new listings is the reason for the lower inventory.

As existing homes are sold and excess inventory comes off the market, new home construction gets a boost. On average, for every eight homes sold, a new home is constructed.

Increasing home sales, decreasing unemployment and overall steady growth shows Utah is headed in the right direction.

Posted in Chamber News, Economic Development, Economic Development | No Comments »

Utah leads in exports, World Bank helping

Tuesday, March 6th, 2012

Yet another hint that Utah’s economy is improving—the Beehive State is once again a leader in merchandise export growth in the U.S. with 39.5 percent growth from 2010 to 2011. This is the third year in a row that Utah has topped the list when it comes to growth in exports.

In 2010, President Barack Obama announced a National Export initiative to double exports in five years by helping farmers and small businesses increase and reform their exports. The anticipated impact of this initiative is the creation and support of two million jobs nationwide.

The Salt Lake Chamber outlined a 10-point plan called the Utah Jobs Agenda in January of 2011 emphasizing the importance of exports among other things like education.

Now Utah is leading the U.S. in merchandise export growth and is nearly halfway to Pres. Obama’s goal in only two years. In 2010, Utah had $13.8 billion in exports and that rose to an impressive $18.93 billion in 2011. Over the past five years alone, there’s been an overall 142.3 percent growth from Utah merchandise exports. Considering the economic fall America experienced during that time, this growth is rather remarkable.

World Trade Center Executive Vice President and Chief of Operations Elizabeth Goryunova says Utah’s export growth increase can be attributed to “a rise in awareness to what we are trying to achieve,” which is to increase the number of companies that aren’t exporting to establish international connections to start exporting goods. Goryunova says another goal is to “expand the market of the one percent of companies that do export.”

The World Bank issues grants and loans to developing countries for significant projects—coordinating with their governments to decide the best way to pursue them. The United States is a big shareholder in the World Bank and is a big contributor alongside other giants like Japan.

When the World Bank and the individual government of a country seeking assistance decide on a course of action, the World Bank calls on resources and companies of sponsors to contribute to the cause—including those in the U.S. This is where our exports get a big boost.

While Utah’s earnings from exports don’t compare to the hundreds of billions of dollars a seaside state does, Utah is experiencing export growth, while those ports have seen declines in revenue.

A big contributor to Utah’s success is the rising price of primary metals, like gold and copper. Because of this, our export total increases even though we may not necessarily be exporting more goods. Primary metals attributed to 64 percent of Utah’s exports in 2011—an increase of about 15 percent from 2010.

So what does this export growth mean? More jobs. The rise in merchandise exports increase production in Utah, creating more jobs that start the ripple effect that boosts the local economy. For every $90,000 in exports, one job is created. For example, with the $5 billion dollar boost in exports, Utah created 55,000 jobs more than it did in 2010.

By moving Utah businesses into profitable global markets, and by helping them secure World Bank funded projects, Utah exports can continue to increase at record levels. Chamber members interested in learning more about World Bank funded projects can contact the Chamber for more information.

Posted in Economic Development, Economic Development, International Business, Utah Jobs Agenda, Utah Rankings, World Trade Center Utah | 1 Comment »

« Older Entries