If it ain't broke ... Economic forecast 2006.

• Author: Burningham, Lucy
• Position: Cover Story

Over the last four years, the national economy has performed like a precariously balanced egg: fragile on one count and wobbly on another. Any number of circumstances--rising gas prices, natural disaster, inflation, rising interest rates--have seemed capable of causing it to plunge in an unseemly splat. But despite this apparent shakiness, the economy has recently found stability. In fact, a closer look now reveals that its shell is stronger than the casual observer may have thought.

With great interest, Utah consumers and business owners have been watching the developments closely, trying to determine exactly how the national economy will affect the state's situation. Jeff Thredgold, economic consultant for Zions Bank, says Utahns can relax and enjoy continued growth during the coming year--the state's economy is in good shape and should remain that way through 2006, even taking into account national factors. While the state's economic growth may wane a bit during 2006 due to a slowing global economy, Utahns should feel confident that the economy will remain solid and intact.

The majority of economists and industry analysts share Thredgold's optimism, and why shouldn't they? Ever since the dark days that started around 2001, when words like "recession" were never spoken to avoid any self-fulfilling prophecies, Utah's economic conditions have been slowly improving.

And during the first three quarters of 2005, the most perceptive of Utahns may have stopped in their tracks, overcome by the sound of a collective sigh of relief that emanated from nearly every industry "We're not experiencing boom conditions," Thredgold muses, "but it sure does feel better."

Old Wounds

When Kelly Matthews, chief economist for Wells Fargo Bank, predicts that Utah's job growth in 2005 should average somewhere between 3.25 and 3.5 percent, he sounds excited. He reels off the job growth numbers from the past few years: 0.6 percent in 2001, -0.7 in 2002 and the flat line of 0 percent in 2003. No wonder he's energized by 2005.

Thredgold recorded a 3.7 percent job growth for a 12-month period starting in the fall of 2004, making Utah the fourth best in the nation for job growth behind neighbors Nevada, Arizona and Idaho. Somehow, the West has become the best (unless you're Colorado) even though the recession thumped the region harshly.

"During this last mild recession, every region got hit, but we got hit particularly hard," Thredgold says, a rarity for the West. For the cause of this negative impact, he points to Utah's employment concentration of "the four T's: technology, telecom, travel and tourism." In the post Sept. 11 climate, the four T's couldn't remain strong. And although Thredgold says the 2002 Winter Olympic Games mitigated the pain, the boost wasn't enough to erase the state's woes entirely.

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Americans traveled less in 2002, and Utah felt the impact of their urge to stay home. Nationally, air traffic declined 20 percent, and no one in Utah was hiring extra lifties or park rangers. The tech sector had discovered the nature of its own bubble, as the champagne-popping-the-Dow's-over-10,000 days turned into simple survival-of-the-fittest strategies.

Signs of Recovery

But times have changed. And the survivors are stronger and smarter, more realistic and appreciative of their successes. While no one is throwing a party quite yet, almost every sector has reason to smile. Thredgold says that...