The Utah economy is now the second strongest in the nation, and the news could be even better than that ranking indicates.
“We are arguably the best economy in the nation right now,” says Natalie Gochnour, chief economist of the Salt Lake Chamber.
Utah’s economy is currently growing at 2.9 percent—essentially at the historical average—and trails only North Dakota, which is growing at 3.6 percent. Unlike North Dakota’s highly energy-dependent economy, Utah’s growth comes from a more diverse group of industries.
The Hachman index ranks how closely state economies mirror the diversity of the national economy. By this scale, Utah is the sixth most diverse state economy, better than a 92 percent match to the overall U.S. economy, trailing only Illinois, Missouri, Colorado, Pennsylvania and California.
Four industry sectors are growing by over six percent according to data released by the Utah Department of Workforce Services. The Information sector grew by 7.3 percent from Dec. 2011-Dec. 2012. Leisure and Hospitality wasn’t far behind at 7.1 percent.
“The Leisure and Hospitality number has everything to do with snow,” says Gochnour. “Dec. 2011 was not a great month for snow, but it was certainly a different story this year.”
Only two sectors of the state economy did not post positive numbers. Government remained flat and construction showed a 2.2 percent decrease. Gochnour says she believes the construction sector is primed for growth.
“Housing is back in this state and it looks like it will be in a positive cycle for the next four to six years,” says Gochnour. “Even though that number has been bouncing from positive to negative over the past few months, overall construction has been growing in our state.”
Housing numbers support her belief. Median sales prices of homes have increased over 10 percent in the Logan metropolitan statistical area (MSA) from the third quarter of 2011 to the same time in 2012. Both the Salt Lake City MSA (11.6 percent) and the Provo-Orem MSA (10.5 percent) have also posted double-digit increases. Overall, Utah MSA median sales prices have increased 10.8 percent in that time period, according to Moody’s Analytics.
Gochnour says the Utah economy has moved up the rankings because of competitive advantages including an engaged business community, a robust, young workforce, a first-rate transportation infrastructure, a fiscally responsible government and high quality universities.