2010 economic outlook: watching for signs of recovery.

• Author: Francom, Sarah Ryther

It's been approximately two years since the recession gripped the nation, halting economic growth across the globe. Though Utah's economy didn't feel the recession as quickly as much of the nation did, the Beehive State proved economically vulnerable as housing prices fell, lending were practices tightened, consumer spending dropped and unemployment rates rose.

Whether the owner of a mom and pop store or CEO of a major corporation, the question everyone wants an answer to is: When will the economy fully recover? Though there's no concrete answer to this looming question, there are economic signs to watch out for. While many of those signs are pointing to a long recovery, the good news is Utah is positioned in the right economic direction.

Utah Employment Growth by Industry from October 2008 to 2009 Total -3.3 Natural Resources 0.0 Construction -15.8 Manufacturing -9.2 Trade, Trans., Utilities -3.4 Information 1.9 Financial Activities -2.6 Prof., and Business -4.8 Education and Health 4.0 Leisure and Hospitality -4.7 Other Services -3.7 Government 1.5 Note: Table made from bar graph. Source: U.S. Bureau of Labor Statistics [GRAPHIC OMITTED]

As this graph indicates, Utah's construction industry has been hit the hardest. And many construction industry leaders agree that 2010 isn't going to be much better. "We're thinking 2010 is going to be the toughest year we've seen," says Bob Tempest, vice president of Tempest Enterprises. "With the people we've talked to in our industry and around it seems to be a consensus that that is going to be the case. If [construction companies] can get through the next 12 months they'll probably be OK after that, but it's going to be very difficult."

Unemployment Woes

Last month, Utah reached a 6.5 percent unemployment rate. Though much lower than the unemployment rate gripping the nation--the U.S. unemployment rate is now 10 percent--the state's unemployment rate is nothing to boast about. According to Mark Knold, senior economist at the Department of Workforce Services, Utah's relatively low unemployment rate is likely to go up once seasonally adjusted. "Because of the sizable gap [between the U.S. and Utah's unemployment rate], it is anticipated that upcoming revisions to Utah's 2009 unemployment rates should raise Utah's unemployment rate and somewhat narrow this gap." How much will the state's unemployment rate go up? "Probably a few numbers, but not up to 10 percent," Knold says.

According to DWS, Utah employment fell by approximately 51,500 jobs (down 4.1 percent) during the past 12 months. To put this into perspective, Utah added 1,900 jobs in 2008, 49,600 jobs in 2007, 55,700 jobs in 2006, 43,700 jobs in 2005 and 30,200 jobs in 2004. The state's unemployment rate averaged 3.4 percent during 2008, 2.7 percent in 2007, 3.0 percent in 2006 and 4.1 percent during 2005, DWS reports.

During 2010, Knold anticipates more job losses, but not at as high of a rate as during 2009. He predicts another 21,000 jobs will be removed from Utah's economy during 2010.

While no industry has been unaffected by the slowdown, nearly 75 percent of Utah's job loses are concentrated in construction, manufacturing, and professional and business services, according to Commerce CRG's monthly "Utah's...