Tuesday, February 10, 2015

Box Elder County Economic Update

The Bear River Region Edges Ever Closer to Full Recovery

By Matt Schroeder

Post-recession economic recoveries are long and arduous processes no matter what, but recessions involving financial crises are historically even slower.  Utah and the Bear River region have been plugging along steadily for the last few years recovering jobs at an average rate of 2 to 3 percent per year and reaching a point where most counties have surpassed pre-recession levels.  Yet economists still talk in terms of recovery rather than in terms of normal economic expansion.  Why is that?  How do we know when the recovery is complete?

There are a variety of indicators that economists look at when determining the relative progress of a recovery.  One important one is the unemployment rate.  When the unemployment rate bottoms-out (i.e. when it stops falling), it may be a sign that labor markets have reached a “natural” or stable state, and thus recovered.  In the Bear River region, the unemployment rate fell 0.3 percentage points from December 2013 to December 2014, indicating that the recovery may not yet be complete, but it continues to edge ever closer.          

Box Elder County
  • Year-over-year payroll employment growth in Box Elder County accelerated to 4.4 percent in the third quarter of 2014 gaining additional steam over the 4 percent growth of the second quarter.  The increase represents 740 more jobs compared to the same time last year with the manufacturing industry leading the way adding 230 new jobs since the third quarter 2013.
  • Box Elder County’s unemployment rate continued on a downward trajectory to 3.6 percent in December.  This is an entire percentage point less than in December 2013, and brings Box Elder closely in line with the state average unemployment rate of 3.5 percent.
  • Average monthly wages picked up to 1.9 percent year-over-year growth in the third quarter and outpaced statewide growth of 1.6 percent after having grown only 0.9 percent in the second quarter of 2014.  Box Elder’s average monthly wage came in at $2,875 closing the gap on the Utah average of $3,429.  Wage growth has remained relatively subdued over the course of the recovery, so the uptick is a welcome sign of potential improvement.
  • As employment strengthens and wages start to catch up, the expectation is that consumer and business spending will pick up as well and Box Elder County is no exception.  Year-over-year change in taxable sales jumped to 8.6 percent in the third quarter, reaching more than $156 million. 
  • Motor vehicle and parts dealers increased sales by almost $5 million compared to the same quarter last year, and the manufacturing, construction and wholesale trade in durable goods industries were all also large contributors with respective increases of $3.5 million, $2.5 million and 1.4 million.