By Mae Anderson
The Associated Press
New York » More than 80 percent of economists believe the recession is over and an expansion has begun, but they expect the recovery will be slow as worries over unemployment and high federal debt persist.
That consensus comes from leading forecasters in a survey by the National Association for Business Economics released Monday.
"The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines," said NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University.
The forecasters upgraded the economic outlook for the next several quarters, but cautioned that unemployment rates and the federal deficit are expected to remain high through the next year. Forecasters now expect the economy, as measured by gross domestic product, to advance at a 2.9 percent pace in the second half of the year, after falling for four straight quarters for the first time on records dating to 1947. They expect a 3 percent gain in 2010.
Still, the federal deficit has ballooned and the jobless rate is expected to lag behind, as employers remain cautious.
The unemployment rate rose to 9.8 percent in September from 9.7 percent, the Labor Department said earlier this month, the highest point in 26 years.
Forecasters expect the unemployment rate to continue to rise, to 10 percent in the first quarter of next year, before edging down to 9.5 percent by the end of 2010.
The recession, the worst since the 1930s, has eliminated a net total of 7.2 million jobs. More job cuts were announced last week. Thermo Fisher Scientific Inc., which makes industrial and scientific equipment, said it will close a plant in Dubuque, Iowa, next year, costing 350 jobs.
Worries about unemployment are likely to continue to constrain household spending. Personal consumption spending likely began rising in the second half of this year, but is expected to remain low in 2010. Still, Americans aren't expected to save as much as they have in past decades. The savings rate is expected to be above the 2 percent average of the past four years, but below the 9 percent average in the 1970s and 1980s.
The housing recovery is one bright spot. Forecasters expect 2010 to be the first year since 2005 that the housing sector will contribute to overall growth. Home prices are expected to rise 2 percent in 2010, but panelists do not believe that will stifle the housing recovery.
Inflation is expected to remain low due to the weak labor market and other factors. Thus, the NABE panel -- which consists of 44 economists surveyed Sept. 2 through Sept. 24 -- expects the federal funds rate to remain at its current record low near zero until late next spring, before a gradual rise begins.
"The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation," said Reaser.
Tuesday, October 13, 2009
Home-buying incentives available, but time is short
Economy » The two programs are intended to help spur the sale of houses.
By Lesley Mitchell
The Salt Lake Tribune
Homebuyers along the Wasatch Front are racing to meet a deadline for purchasing incentives that expire on Nov. 30.
The larger of the two incentives is an $8,000 federal income tax credit geared toward first-time buyers of new or existing homes, although anyone who hasn't owned a home in the past three years is eligible. Utah also is offering a $4,000 grant for buyers of newly built homes. Both state and federal officials stress that there is no leeway on the deadlines for the incentives, which are aimed at boosting the sagging economy and real estate sector.
"You could be a day late and $8,000 short," said IRS spokesman Bill Brunson.
Salt Lake City Realtor DeAnna Dipo is telling prospective buyers who are interested in either incentive they probably are going to need to be under contract to buy a home no later than the end of October to allow for sufficient time for loan underwriting and to beat the Nov. 30 deadline to close.
"It's definitely getting people off the fence," said Ryan Kirkham, president of the Salt Lake Board of Realtors. "There's no question that it's having a positive effect on home sales right now." Further motivating buyers are super-low mortgage rates of about 5 percent or even below 5 percent.
"A lot of people realize that rates aren't always going to be this low," Kirkham said.
First-time buyer Saxony Sharkey qualified this summer for a mortgage at 5.25 percent to purchase an existing home in West Jordan. Like other buyers, she first heard about the federal home-buying incentive last year. But last year, the incentive was a $7,500 no-interest loan that had to be repaid.
Only this year, when the government started offering an $8,000 tax credit -- it does not have to be repaid if the home remains a primary residence for at least 36 months -- did she make her move.
"I thought, this is something I didn't want to pass it up," she said.
The state incentive, dubbed "Home Run 2," provides $4,000 grants to buyers who meet certain criteria and buy new construction. It follows the original Home Run program, which provided $6,000 grants to new home buyers. That program ended in June after all the funds were exhausted and 1,652 grants had been issued.
Today, there's about 1,400 grants available out of 1,950 when the program debuted on Sept. 4.
"The interest level has been very high," said Grant Whitaker, president and CEO of the Utah Housing Corp., which is administering the program.
Clark Ivory, who lobbied the state to create the grant program, said his home-building company had 60 sales in September, up from 47 in September 2008.
Cristy and Luis Duran, who are renting, didn't think they could afford to buy. But after a local real estate agent told them about the incentives, they went to a mortgage lender to see if they could qualify to buy a townhome.
They did qualify, and are using the $4,000 state incentive toward their down payment. Once they close in a few weeks, they will file an amended return to get the $8,000 federal incentive, which they plan to use to finish their basement.
"Without this money, we would not have been able to buy this home," Cristy Duran said.
Sharkey said she elected to amend her 2008 tax return after she bought her home this summer, and expects to get the tax credit money sometime over the holidays. Others are waiting to file for the credit in early 2010 when they file their 2009 return. Half of Sharkey's $8,000 was earmarked for some upgrades; the other half is destined for her saving account.
"I wanted to use some of its on upgrades," she said. "But based on the way things are going right now [with the economy], I thought it would be good [to put] half of it in savings."
lesley@sltrib.com
By Lesley Mitchell
The Salt Lake Tribune
Homebuyers along the Wasatch Front are racing to meet a deadline for purchasing incentives that expire on Nov. 30.
The larger of the two incentives is an $8,000 federal income tax credit geared toward first-time buyers of new or existing homes, although anyone who hasn't owned a home in the past three years is eligible. Utah also is offering a $4,000 grant for buyers of newly built homes. Both state and federal officials stress that there is no leeway on the deadlines for the incentives, which are aimed at boosting the sagging economy and real estate sector.
"You could be a day late and $8,000 short," said IRS spokesman Bill Brunson.
Salt Lake City Realtor DeAnna Dipo is telling prospective buyers who are interested in either incentive they probably are going to need to be under contract to buy a home no later than the end of October to allow for sufficient time for loan underwriting and to beat the Nov. 30 deadline to close.
"It's definitely getting people off the fence," said Ryan Kirkham, president of the Salt Lake Board of Realtors. "There's no question that it's having a positive effect on home sales right now." Further motivating buyers are super-low mortgage rates of about 5 percent or even below 5 percent.
"A lot of people realize that rates aren't always going to be this low," Kirkham said.
First-time buyer Saxony Sharkey qualified this summer for a mortgage at 5.25 percent to purchase an existing home in West Jordan. Like other buyers, she first heard about the federal home-buying incentive last year. But last year, the incentive was a $7,500 no-interest loan that had to be repaid.
Only this year, when the government started offering an $8,000 tax credit -- it does not have to be repaid if the home remains a primary residence for at least 36 months -- did she make her move.
"I thought, this is something I didn't want to pass it up," she said.
The state incentive, dubbed "Home Run 2," provides $4,000 grants to buyers who meet certain criteria and buy new construction. It follows the original Home Run program, which provided $6,000 grants to new home buyers. That program ended in June after all the funds were exhausted and 1,652 grants had been issued.
Today, there's about 1,400 grants available out of 1,950 when the program debuted on Sept. 4.
"The interest level has been very high," said Grant Whitaker, president and CEO of the Utah Housing Corp., which is administering the program.
Clark Ivory, who lobbied the state to create the grant program, said his home-building company had 60 sales in September, up from 47 in September 2008.
Cristy and Luis Duran, who are renting, didn't think they could afford to buy. But after a local real estate agent told them about the incentives, they went to a mortgage lender to see if they could qualify to buy a townhome.
They did qualify, and are using the $4,000 state incentive toward their down payment. Once they close in a few weeks, they will file an amended return to get the $8,000 federal incentive, which they plan to use to finish their basement.
"Without this money, we would not have been able to buy this home," Cristy Duran said.
Sharkey said she elected to amend her 2008 tax return after she bought her home this summer, and expects to get the tax credit money sometime over the holidays. Others are waiting to file for the credit in early 2010 when they file their 2009 return. Half of Sharkey's $8,000 was earmarked for some upgrades; the other half is destined for her saving account.
"I wanted to use some of its on upgrades," she said. "But based on the way things are going right now [with the economy], I thought it would be good [to put] half of it in savings."
lesley@sltrib.com
Thursday, May 28, 2009
Utah execs more upbeat about state's economy
After two years of growing pessimism about the economy, some Utah business leaders are saying that the worst of the recession may be over.
Optimism among executives about the futures of their companies increased in the opening three months of 2009 for the first time since the fourth quarter 2006, according to the bank's latest quarterly forecast of the economy, released Tuesday.
"It's the first time I've seen attitudes look more upbeat, to see hope for the future, rather than a steady decline," said Julie Olsen, an analyst for Dan Jones and Associates, the Salt Lake City market research firm that constructed the forecast for Zions.
Olsen said it's too soon to call the upswing the start of a recovery from the worst recession gripping Utah since the 1930s. But "at least during this quarter we are willing to say that the executives in this survey see [the economy] improving."
The level of optimism hardly compares to when Zions established its quarterly report in the second quarter 2006, when Utah's economy was booming. Back then 90 percent of the executives who took part were bullish on their businesses, compared with 65 percent today.
In hindsight, second quarter 2006 turned out to be the survey's high point. Except for small increases in the fourth quarters of 2006 and 2007, optimism fell steadily until the first quarter 2009, and business leaders hope the turnaround sticks.
"We have seen an uptick in demand, which is very good," said Dan England, chairman of Salt Lake City-based trucking giant C.R. England Inc. "We are not going to be too aggressive on our predictions, but we are hoping and thinking that things may be improving a little bit."
The Zions forecast is based on a survey of 337 executives from April 2 through April 30. Olsen said a "notable" number of executives believe their companies' "health" will improve in the second quarter ending June 30. Forty-four percent sense better times ahead, compared with just 22 percent in the last three months of 2008.
Similarly, more executives expect their companies to maintain or boost spending on capital projects and add employees during the quarter, she said. Fifty-seven percent of executives in the statewide survey anticipate spending as much or more on capital expenditures, compared with 41 percent in the fourth quarter.
The executives showed more inclination to hire additional workers in the second quarter. Twenty-six percent said their work forces would increase somewhat or greatly, up from 17 percent who in the first quarter said their payrolls probably would increase.
"What you have is some optimism that there are parameters to the recession," said Mark Knold senior economist at the state Department of Workforce Services.
"Before, it just felt like it was in a free fall, like nobody knew where it was going to go [or] what it would take to get their hands around it.
"What's changed now is there is a feeling that a bottom is somewhere close, and some of the indicators may have seen their deepest day," he said.
Knold doesn't think Utah is out of the woods, though. Initial claims for unemployment benefits are still hovering around 3,000 per week, three times greater than normal levels.
"I'd like to see them trending below 2,000" before calling a bottom to the labor market, he said.
By Paul Beebe
The Salt Lake Tribune
Updated: 05/26/2009 08:54:56 PM MDT
Optimism among executives about the futures of their companies increased in the opening three months of 2009 for the first time since the fourth quarter 2006, according to the bank's latest quarterly forecast of the economy, released Tuesday.
"It's the first time I've seen attitudes look more upbeat, to see hope for the future, rather than a steady decline," said Julie Olsen, an analyst for Dan Jones and Associates, the Salt Lake City market research firm that constructed the forecast for Zions.
Olsen said it's too soon to call the upswing the start of a recovery from the worst recession gripping Utah since the 1930s. But "at least during this quarter we are willing to say that the executives in this survey see [the economy] improving."
The level of optimism hardly compares to when Zions established its quarterly report in the second quarter 2006, when Utah's economy was booming. Back then 90 percent of the executives who took part were bullish on their businesses, compared with 65 percent today.
In hindsight, second quarter 2006 turned out to be the survey's high point. Except for small increases in the fourth quarters of 2006 and 2007, optimism fell steadily until the first quarter 2009, and business leaders hope the turnaround sticks.
"We have seen an uptick in demand, which is very good," said Dan England, chairman of Salt Lake City-based trucking giant C.R. England Inc. "We are not going to be too aggressive on our predictions, but we are hoping and thinking that things may be improving a little bit."
The Zions forecast is based on a survey of 337 executives from April 2 through April 30. Olsen said a "notable" number of executives believe their companies' "health" will improve in the second quarter ending June 30. Forty-four percent sense better times ahead, compared with just 22 percent in the last three months of 2008.
Similarly, more executives expect their companies to maintain or boost spending on capital projects and add employees during the quarter, she said. Fifty-seven percent of executives in the statewide survey anticipate spending as much or more on capital expenditures, compared with 41 percent in the fourth quarter.
The executives showed more inclination to hire additional workers in the second quarter. Twenty-six percent said their work forces would increase somewhat or greatly, up from 17 percent who in the first quarter said their payrolls probably would increase.
"What you have is some optimism that there are parameters to the recession," said Mark Knold senior economist at the state Department of Workforce Services.
"Before, it just felt like it was in a free fall, like nobody knew where it was going to go [or] what it would take to get their hands around it.
"What's changed now is there is a feeling that a bottom is somewhere close, and some of the indicators may have seen their deepest day," he said.
Knold doesn't think Utah is out of the woods, though. Initial claims for unemployment benefits are still hovering around 3,000 per week, three times greater than normal levels.
"I'd like to see them trending below 2,000" before calling a bottom to the labor market, he said.
By Paul Beebe
The Salt Lake Tribune
Updated: 05/26/2009 08:54:56 PM MDT
Tuesday, May 19, 2009
National papers put spotlight on Salt Lake City
May 18th, 2009 @ 4:16pm
By Amanda Butterfield
SALT LAKE CITY -- Two of the most-read newspapers in the country have recently published lengthy articles about Utah, and they're very positive. That has community leaders very excited.
"National coverage is great. It gives a lot of creditability for what we're doing here across Salt Lake," said Jason Mathis, executive director of the Downtown Alliance.
Mathis couldn't be happier with the recent articles in USA Today and the New York Times. The USA Today article notes what a great place Salt Lake is to have a second home and how there's so much so do that's all close by for visitors.
"Utah has a unique connection of urban city center and mountain resorts. Nobody else has that," Mathis said.
The New York Times article goes into detail about Salt Lake's construction of the City Creek project. At a time when other building projects across the country are at a standstill, The Church of Jesus Christ of Latter-day Saints is on schedule reviving downtown.
"We've got great construction going with more the 1,000 construction workers in the downtown area every day. We have dozens of small businesses that have opened up in the past month," Mathis said.
He says it's important to note, because the construction workers are from all over the valley, the money being made doesn't just stay downtown. "The money generated downtown goes throughout the entire region," he said.
Whether you were born and raised in Utah or recently moved to the state, Mathis says these articles prove Utahns have a lot to be proud of. "We take living here for granted, but people who come from outside, they see the mountains, the awesome city, and they're floored. This is really a remarkable place to live," he said.
Even the magazine Men's Fitness magazine is taking notice of Salt Lake City. In February, Salt Lake was named the nation's fittest city.
By Amanda Butterfield
SALT LAKE CITY -- Two of the most-read newspapers in the country have recently published lengthy articles about Utah, and they're very positive. That has community leaders very excited.
"National coverage is great. It gives a lot of creditability for what we're doing here across Salt Lake," said Jason Mathis, executive director of the Downtown Alliance.
Mathis couldn't be happier with the recent articles in USA Today and the New York Times. The USA Today article notes what a great place Salt Lake is to have a second home and how there's so much so do that's all close by for visitors.
"Utah has a unique connection of urban city center and mountain resorts. Nobody else has that," Mathis said.
The New York Times article goes into detail about Salt Lake's construction of the City Creek project. At a time when other building projects across the country are at a standstill, The Church of Jesus Christ of Latter-day Saints is on schedule reviving downtown.
"We've got great construction going with more the 1,000 construction workers in the downtown area every day. We have dozens of small businesses that have opened up in the past month," Mathis said.
He says it's important to note, because the construction workers are from all over the valley, the money being made doesn't just stay downtown. "The money generated downtown goes throughout the entire region," he said.
Whether you were born and raised in Utah or recently moved to the state, Mathis says these articles prove Utahns have a lot to be proud of. "We take living here for granted, but people who come from outside, they see the mountains, the awesome city, and they're floored. This is really a remarkable place to live," he said.
Even the magazine Men's Fitness magazine is taking notice of Salt Lake City. In February, Salt Lake was named the nation's fittest city.
Friday, April 24, 2009
Economists React: ‘Plunge Is Over’ in Existing-Home Sales
Economists and others weigh in on the decline in existing-home sales.
Home sales have stabilized following the post-Lehmans plunge and remain above January’s trough of 4,490,000. March’s fall is probably just noise rather than a renewed downward trend. Admittedly, around 50% of sales are now related to distressed properties, which is hardly a sign of strength.
But at least these sales are helping to reduce the inventory overhang… Overall, with the housing market having led the economy into the recession, it is no surprise that it might be the first sector to stabilise. Nonetheless, we suspect that prices have yet to reach their floor. –Paul Dales, Capital Economics
This is a bit disappointing but the big picture is still clear; the plunge in sales following the Lehman blowup is over. Unfortunately … prices will continue to fall rapidly for the foreseeable future, though at least the rate of decline should not get any worse. The floor for prices is probably a late 2010 story. –Ian Shepherdson, High Frequency Economics
The report was very disappointing, particularly given the broad-based nature of the declines… With the backdrop for U.S. households continuing to deteriorate on account of the worsening labor market conditions and weakening economy, we expect the housing market correction to continue well into this year. Nevertheless, the pace of decline is likely to ease as improved housing affordability conditions begin to spur housing demand. –Millan L. B. Mulraine, TD Securities
The weaker-than-expected result does not change the broad trend in sales, however, which continues to point to a tenuous stabilization… Sales in the western United States, where foreclosure activity is most prevalent, show a distinctly different pattern than those in other regions. Total existing sales (single family sales plus condos and co-ops) are up 19% year-to-year in the West… The improvement in sales in the Western region is an encouraging sign that discounted prices, record low mortgage rates and various tax incentives are stimulating new demand. –Nomura Global Economics
Although home resales were down in March, one can make a reasonable argument that resales are bottoming (albeit as a result of steep cuts in price as distressed and foreclosure sales make up a large share of existing home sales) as the average level of sales in the first quarter was similar to the fourth quarter’s average. –RDQ Economics
After dropping by 11% in October and November combined, likely reflecting the fallout from the financial meltdown in September, resales have held between 4.49 million and 4.74 million units, pointing to some stabilization in housing demand. With housing affordability rising dramatically thanks to lower prices and lower mortgage rates, demand from first-time homebuyers seems to be on the rise and is clearly supporting the market.
Indeed, the NAR pointed out that first-time buyers accounted for just over half of all existing home sales in March. Still, first-time buyers typically purchase at the lower end of the market, which could help to explain why half of all resales last month were distressed properties. –Omair Sharif, RBS
Compiled by Phil Izzo
Economic insight and analysis from The Wall Street Journal.
Home sales have stabilized following the post-Lehmans plunge and remain above January’s trough of 4,490,000. March’s fall is probably just noise rather than a renewed downward trend. Admittedly, around 50% of sales are now related to distressed properties, which is hardly a sign of strength.
But at least these sales are helping to reduce the inventory overhang… Overall, with the housing market having led the economy into the recession, it is no surprise that it might be the first sector to stabilise. Nonetheless, we suspect that prices have yet to reach their floor. –Paul Dales, Capital Economics
This is a bit disappointing but the big picture is still clear; the plunge in sales following the Lehman blowup is over. Unfortunately … prices will continue to fall rapidly for the foreseeable future, though at least the rate of decline should not get any worse. The floor for prices is probably a late 2010 story. –Ian Shepherdson, High Frequency Economics
The report was very disappointing, particularly given the broad-based nature of the declines… With the backdrop for U.S. households continuing to deteriorate on account of the worsening labor market conditions and weakening economy, we expect the housing market correction to continue well into this year. Nevertheless, the pace of decline is likely to ease as improved housing affordability conditions begin to spur housing demand. –Millan L. B. Mulraine, TD Securities
The weaker-than-expected result does not change the broad trend in sales, however, which continues to point to a tenuous stabilization… Sales in the western United States, where foreclosure activity is most prevalent, show a distinctly different pattern than those in other regions. Total existing sales (single family sales plus condos and co-ops) are up 19% year-to-year in the West… The improvement in sales in the Western region is an encouraging sign that discounted prices, record low mortgage rates and various tax incentives are stimulating new demand. –Nomura Global Economics
Although home resales were down in March, one can make a reasonable argument that resales are bottoming (albeit as a result of steep cuts in price as distressed and foreclosure sales make up a large share of existing home sales) as the average level of sales in the first quarter was similar to the fourth quarter’s average. –RDQ Economics
After dropping by 11% in October and November combined, likely reflecting the fallout from the financial meltdown in September, resales have held between 4.49 million and 4.74 million units, pointing to some stabilization in housing demand. With housing affordability rising dramatically thanks to lower prices and lower mortgage rates, demand from first-time homebuyers seems to be on the rise and is clearly supporting the market.
Indeed, the NAR pointed out that first-time buyers accounted for just over half of all existing home sales in March. Still, first-time buyers typically purchase at the lower end of the market, which could help to explain why half of all resales last month were distressed properties. –Omair Sharif, RBS
Compiled by Phil Izzo
Economic insight and analysis from The Wall Street Journal.
Thursday, March 19, 2009
Utah may see relatively fast economic recovery
While tied to outside influences more than ever and facing slipping economic statistics, Utah nonetheless will fare better than many states when emerging from the economic downturn, the chief economist in the Governor's Office said Tuesday.
Speaking Wednesday at the Utah Foundation's annual meeting, Juliette Tennert said Utah's economy is "more broadly integrated" with the national and global economy than ever before and thus Utah's performance will depend on what happens at those levels. But several factors — unique demographics and industry diversity among them — work in Utah's favor for recovery, she said.
"We have one of the most diverse economies in the nation," Tennert said. "That means that while we're certainly impacted by the national contraction, we'll recover quicker than many other states."
Tennert is predicting Utah's unemployment rate to pass 6.5 percent in 2010 although still be relatively low when compared to most other states and the national prediction of above 9 percent. Utah employment will move from slight growth to a 2.5 percent decline in 2009 and flatten in 2010. "This will be the worst decline since the 1950s; however, it will not be as bad as the 3-plus decline that's expected at the national level," Tennert said.
"If not for the infusion of cash (from the federal economic stimulus package), I expect that this picture would be even grimmer," Tennert said. "While the outlook over the next year is certainly weak, we should not forget about the inherent strength and durability of Utah's economy. We are well-positioned to manage the downturn, and we really should be grateful for those dynamics that I mentioned that will help keep Utah's downturn less severe and help us to recover quicker than in many other states."
Economic woes led the Legislature to budget cuts of $250 million and later $350 million. Senate Majority Assistant Whip Greg Bell, R-Fruit Heights, described those cuts as "truly Draconian" but also "done with as much precision as possible."
Federal stimulus funds "effectively hide" effects of budget cuts in 2010, but the full effects will be seen in 2011, he said.
"We don't live in a vacuum, and I think that's going to be the message today, that Utah is doing extraordinarily well in so many regards and though our ship seems to sail fairly well, we are getting a lot of backwash from national and international conditions over which we have no control," Bell said. "So for a while it seemed some were immune and now it seems no one is, and we're all going to have to live with the difficult circumstances and conditions imposed upon us by these challenging times."
Natalie Gochnour, chief operating officer at the Salt Lake Chamber, said long-term economic success for Utah can be tied to globalization efforts, including continued funding and a building to house the World Trade Center Utah and becoming a "more welcoming" state. "We live in a post-American world, period," she said. Improving education and air quality and developing energy security were among her other suggestions.
By Brice Wallace
Deseret News
Published: Wednesday, March 18, 2009
Speaking Wednesday at the Utah Foundation's annual meeting, Juliette Tennert said Utah's economy is "more broadly integrated" with the national and global economy than ever before and thus Utah's performance will depend on what happens at those levels. But several factors — unique demographics and industry diversity among them — work in Utah's favor for recovery, she said.
"We have one of the most diverse economies in the nation," Tennert said. "That means that while we're certainly impacted by the national contraction, we'll recover quicker than many other states."
Tennert is predicting Utah's unemployment rate to pass 6.5 percent in 2010 although still be relatively low when compared to most other states and the national prediction of above 9 percent. Utah employment will move from slight growth to a 2.5 percent decline in 2009 and flatten in 2010. "This will be the worst decline since the 1950s; however, it will not be as bad as the 3-plus decline that's expected at the national level," Tennert said.
"If not for the infusion of cash (from the federal economic stimulus package), I expect that this picture would be even grimmer," Tennert said. "While the outlook over the next year is certainly weak, we should not forget about the inherent strength and durability of Utah's economy. We are well-positioned to manage the downturn, and we really should be grateful for those dynamics that I mentioned that will help keep Utah's downturn less severe and help us to recover quicker than in many other states."
Economic woes led the Legislature to budget cuts of $250 million and later $350 million. Senate Majority Assistant Whip Greg Bell, R-Fruit Heights, described those cuts as "truly Draconian" but also "done with as much precision as possible."
Federal stimulus funds "effectively hide" effects of budget cuts in 2010, but the full effects will be seen in 2011, he said.
"We don't live in a vacuum, and I think that's going to be the message today, that Utah is doing extraordinarily well in so many regards and though our ship seems to sail fairly well, we are getting a lot of backwash from national and international conditions over which we have no control," Bell said. "So for a while it seemed some were immune and now it seems no one is, and we're all going to have to live with the difficult circumstances and conditions imposed upon us by these challenging times."
Natalie Gochnour, chief operating officer at the Salt Lake Chamber, said long-term economic success for Utah can be tied to globalization efforts, including continued funding and a building to house the World Trade Center Utah and becoming a "more welcoming" state. "We live in a post-American world, period," she said. Improving education and air quality and developing energy security were among her other suggestions.
By Brice Wallace
Deseret News
Published: Wednesday, March 18, 2009
Wednesday, March 18, 2009
Study: Utah poised to rebound from recession quickly
SALT LAKE CITY -- A new study shows Utah may be poised to recover from the recession more quickly than most states. The reason, according to the conservative authors, is Utah's business-friendly environment.
This is a conservative study with a lot of praise for Utah's conservative Legislature and its policies, but the forecast is a pragmatic look at what businesses want and what Utah has.
Poised to attract more high-tech companies, more in research and medicine, in recreation, tourism and energy; Utah may have what it takes to climb out of the recession first.
"We do have a very attractive environment for business, and it's been stable," said Sen. Wayne Niederhauser, R-Sandy.
Niederhauser is one of the legislators cited in the study "Rich States, Poor States." Written on behalf of the conservative American Legislative Exchange Council, or ALEC, it claims Utah is one of the states that has advantages over other states.
One of the advantages comes in the area of tax policy, specifically income tax reform. Utah also has less government regulation and involvement is a plus for businesses.
Gov. Jon Huntsman is also working to promote Utah as a future renewable energy hub. Together, it could add up to an even more prosperous future for Utah.
"There probably is not another state in America right now with better practices, in terms of attracting, building and promulgating renewable energy," Huntsman said.
At the same time, Utah has a chance to lead the way in using prosperity to create a better life for people. It can do so in many ways. One example is in being smart about health care reform.
"We're saying it's great the state is embarking on health system reform. Let's make sure that, at the end of the day, those reforms result in predictable costs for businesses and affordable costs for employees so they can succeed on the job," said Judi Hilman, with the Utah Health Policy Project.
By comparison, states like California and New York have been raising taxes steadily. That has led to a very difficult downward spiral for those states.
By Richard Piatt
KSL-Salt lake City, Utah
This is a conservative study with a lot of praise for Utah's conservative Legislature and its policies, but the forecast is a pragmatic look at what businesses want and what Utah has.
Poised to attract more high-tech companies, more in research and medicine, in recreation, tourism and energy; Utah may have what it takes to climb out of the recession first.
"We do have a very attractive environment for business, and it's been stable," said Sen. Wayne Niederhauser, R-Sandy.
Niederhauser is one of the legislators cited in the study "Rich States, Poor States." Written on behalf of the conservative American Legislative Exchange Council, or ALEC, it claims Utah is one of the states that has advantages over other states.
One of the advantages comes in the area of tax policy, specifically income tax reform. Utah also has less government regulation and involvement is a plus for businesses.
Gov. Jon Huntsman is also working to promote Utah as a future renewable energy hub. Together, it could add up to an even more prosperous future for Utah.
"There probably is not another state in America right now with better practices, in terms of attracting, building and promulgating renewable energy," Huntsman said.
At the same time, Utah has a chance to lead the way in using prosperity to create a better life for people. It can do so in many ways. One example is in being smart about health care reform.
"We're saying it's great the state is embarking on health system reform. Let's make sure that, at the end of the day, those reforms result in predictable costs for businesses and affordable costs for employees so they can succeed on the job," said Judi Hilman, with the Utah Health Policy Project.
By comparison, states like California and New York have been raising taxes steadily. That has led to a very difficult downward spiral for those states.
By Richard Piatt
KSL-Salt lake City, Utah
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