Utah was hit hard at the time, losing a larger share of jobs
than the national average; but, we were fortunate to be one of the most
resilient states in terms of economic rebound. There are plenty of states where
the Great Recession continues to weigh upon them. Employment levels in 14
states are still not back to their pre-recession peak, and another 29 states
have only grown 5.0 percent or less. As the working-age population has grown by
more than 5.0 percent, the job gains nationally have not been enough to fully
employ working-age labor.
Utah lost 7.0 percent employment during the recession. Since
that low, employment has recovered by 18 percent. That is the second best
rebound in the nation. From Utah’s pre-recession employment peak to now, Utah’s
employment has increased by 9.5 percent, third best in the nation. Yet, Utah’s
job growth has not been enough to absorb all of the labor force growth during
that time. Utah’s unemployment rate is low, but the percent of the working-age
population in the labor force is several percentage points below the
pre-recession norm — telling us that potential labor is still not as fully
engaged with the job market as before the recession.
As a whole, Utah has had a notable recession rebound, but
those gains have not been shared equally across all regions. Just like the
national profile, some areas have bounced back strong while others are still
lagging behind. The state’s metropolitan areas have grown well, but many of
Utah’s rural areas cannot say the same. Nine counties have employment levels
below their pre-recession peaks.
In this issue of Local Insights, we profile Utah’s regional
and county economies in light of the 10-year span since the Great Recession.
Bear River Region
Although the three northernmost counties in Utah (Cache, Box
Elder and Rich) are often viewed as a single region, the reality is they each
have distinct economies and experienced differing recessionary impacts and recoveries.
For instance, Box Elder County is reliant on the manufacturing sector, which
was hit hard during the recession. Rich County is highly subject to swings in
tourism spending, which is among the first things consumers pull back on when
money is tight. Cache County, on the other hand, has a more diverse economy and
recession-resilient industries (like education) that help to mitigate the
severity of economic downturns.
Box Elder County
Just prior to the recession in 2008, the manufacturing
sector accounted for nearly 40 percent of Box Elder County’s total employment —
or about 8,100 workers. By 2012, that number had been slashed to around 4,500.
Layoffs at ATK Launch Systems and the La-Z-Boy closure slashed deep into the region’s
economic tissue. Although the initial ATK cuts were the end of NASA’s shuttle
program and not a direct result of recessionary pressures, the recession did
put budgetary constraints on the federal government leading to less money for
NASA and other types of contracts that might have kept ATK at higher employment
levels. In addition, the recession meant virtually no other jobs were available
and many people left the area. Net migration turned outward with about 500
leaving each year in 2011 and 2012.
Box Elder is only now getting back to its pre-recession employment
level of about 21,000. The good news is that since it turned the corner in
2013, growth has been robust — averaging more than 5.0 percent annually. Manufacturing
is still the primary driver of new growth; but within manufacturing, the
products being produced are more diverse. Motor vehicle parts, food and
fabricated metals now make up larger shares of manufacturing employment.
In addition to manufacturing’s resurgence and
diversification, other industries have begun to rise in economic importance
adding to the economy’s overall diversity and future recessionary resilience. For
example, health care services did not even dip during the recession and has
been on the rise since. Prior to the recession, heath care was about 6.0
percent of employment. Now it is up to 9.0 percent.
Rich County
Rich County lost about 150 jobs during the last recession — nearly
27 percent of its average employment. Only Piute County lost a larger
employment share. Tourism is the key to Rich County’s economy; and during
recessions, travel and recreation are among the first luxuries cut to pinch
pennies. Traveler accommodations alone shed more than half of its employment between
2007 and 2012 (from 90 to nearly 40).
Construction took a significant hit as well, shedding about
90 jobs over the same period. Most of the losses were in residential
construction with fewer vacation and retirement homes being built. In 2007,
there were 43 single-family homes permitted in Rich County. By 2012, that
number had dropped to just four.
Rich County’s recovery since late 2012 does not appear to be
driven by tourism spending. Some moderate growth in restaurants indicates
improvement in visitor spending, but the accommodations industry has basically
plateaued since the recession’s end. New single-family home construction is again
on the rise but has yet to return to pre-recession levels. Most of the recovery
growth is local business services, such as repair and maintenance, and building
services. Retail sales employment in lawn and garden, and building materials is
also a significant contributor to the recovery — indicating that local demand is
currently keeping Rich County on its growth trajectory. This is encouraging as
it suggests a shift away from tourism dependence and leaves room for even more
growth once travel spending resumes.
Cache County
Cache County did not contract nearly to the extent of Utah’s
other counties during the recession. It lost less than 800 jobs and contracted
only 1.6 percent. The downturn was short-lived too. The economy started expanding
again in early 2010, and regained its pre-recession employment by mid-2012 when
Box Elder and Rich counties were just bottoming out.
In Cache County there is no single sector that dominates the
local economy the way manufacturing does in Box Elder County. Manufacturing is
Cache County’s largest sector and comprises 19 percent of total employment.
And, most of Cache County’s manufacturing employment is in food manufacturing (especially
dairy and beef), which is highly recession-resilient. During recessions demand
falls for many nonessential goods and services; but core food products, such as
milk and meat, tend to hold steady. In fact, during the recession, employment
in both dairy and beef manufacturing actually grew and helped prop up Cache’s
economy.
Utah State University provided a similar stabilizing effect.
The university is the region’s core economic engine, accounting for about 12
percent of employment. Like food manufacturing, education services are not
prone to major recessionary setbacks. Historically, enrollment actually
increases when unemployment is high as more people who find themselves idle
choose to invest in education.
Cache County’s recovery has been steady and shared across
most industrial sectors. Growth at the university and the human and
intellectual capital it produces boost the vibrancy of other industries, as well.
Professional, scientific and technical services have been expanding employment;
as have medical services and even manufacturing industries, like chemical and
computer and electronic products. Such industry diversification will further
strengthen Cache County and its ability to weather the next recessionary
downturn.
