Box Elder County Economic Update

Box Elder County Ends 2014 with Solid Economic Performance

By Matt Schroeder

Despite a little slowing in job growth, Box Elder County ended 2014 on a relatively positive note. Wages, which have been slow to keep up with the rest of the recovering labor market, finally turned a corner. Taxable sales were up with particular strength in motor vehicles thanks in part to falling oil prices. Unemployment continues to fall and initial unemployment insurance claims are back to pre-recession levels.  Employment growth slowed a bit, but overall, the roots of recovery appear to be firmly set in the region and Cache County’s economic performance at the end of 2014 leaves continued-optimism for 2015 as the rational expectation.

Cache County Economic Update

Cache County Ends 2014 with Solid Economic Performance

By Matt Schroeder

Cache County ended 2014 with steady job growth and deepening consumer confidence. Taxable sales were up more than 5 percent with particular strength in retail markets. Motor vehicle sales were particularly strong thanks in part to falling oil prices. Unemployment in Cache is the lowest in the state.  Employment growth was not particularly impressive, but it was consistent and relatively broad based.  Wages, which have been slow to keep up with the rest of the recovering labor market, are still exhibiting lackluster growth, but overall, the roots of recovery appear to be firmly set in the region and Cache County’s economic performance at the end of 2014 leaves continued-optimism for 2015 as the rational expectation.

Rich County Economic Update

Rich County Ends 2014 with Solid Economic Performance

By Matt Schroeder

Rich County ended 2014 with stable job expansion and encouraging signs for 2015. Wages, which have been slow to keep up with the rest of the recovering labor market, finally turned a corner. Taxable sales were up more than 30 percent with particular strength in retail markets suggesting that consumer confidence continues to build. Motor vehicle sales were particularly strong thanks in part to falling oil prices. Unemployment continues to fall and initial unemployment insurance claims are back to pre-recession levels. Employment growth was not particularly impressive, but it was consistent. Overall, the roots of recovery appear to be firmly set in the region and Rich County’s economic performance at the end of 2014 leaves continued-optimism for 2015 as the rational expectation.

Cache County Economic Indicators

The Bear River region felt the effects of the downturn starting in 2009, when the labor market shed 3,795 jobs from the previous year. For the next two years, the region lost jobs (though Cache County contracted in 2009 only). The tide turned in 2012 when annual job gains in Cache and Rich counties outweighed job losses in Box Elder County. And while regional momentum continued to build in 2013, Bear River’s year-over growth measured consistently slower than the state average. So far, 2014 appears to be a different story with regional employment outpacing the rest of the state through the first six months of the year.

• Year-over payroll employment in Cache County grew 3.3 percent in second quarter 2014. The rate of growth was the same for both the goods-producing and the service-providing sectors. Financial activities, leisure/hospitality, professional/business services, and construction all grew faster than 5 percent compared to the previous year, adding a combined 928 jobs over the year.
• Cache County boasted one of the lowest seasonally-adjusted unemployment rates in the state at 2.7 percent in September. The unemployment rate in the county has measured below 3 percent since March. Such low levels of unemployment are not unheard of in Cache County, but the relatively low rate suggests that the county’s job market is getting considerably more competitive.
• Average monthly wages in second quarter increased 1.7 percent from 2013. And while Cache County’s wage growth was perfectly aligned with the Utah average, the average monthly wages paid in the county totaled $795 less than Utah’s $3,396 per month.
• Cache County’s year-over changes in taxable sales increased for the ninth consecutive quarter. Second quarter 2014 taxable sales in the county totaled just over $370 million, an increase of 2.9 percent from second quarter 2013. Manufacturing business investment figures – the sixth largest industry by sales totals – posted the most notable gain of 16.1 percent.
• In Cache County, 336 homes sold in third-quarter 2014, a decline of 12.5 percent from the previous year. The year-to-date total from 2013 to 2014 indicates that that decline is slightly exaggerated by quarterly volatility, but growth in the housing market seems to be slowing from last year’s pace.

Box Elder County Economic Indicators

The Bear River region felt the effects of the downturn starting in 2009, when the labor market shed 3,795 jobs from the previous year. For the next two years, the region lost jobs (though Cache County contracted in 2009 only). The tide turned in 2012 when annual job gains in Cache and Rich counties outweighed job losses in Box Elder County. And while regional momentum continued to build in 2013, Bear River’s year-over growth measured consistently slower than the state average. So far, 2014 appears to be a different story with regional employment outpacing the rest of the state through the first six months of the year.

• Box Elder payroll job growth in second quarter 2014 accelerated to an annual rate of 4.0 percent, the seventh fastest year-over job growth in the state and 1.2 percentage points faster than the Utah average. In total, the region added 670 jobs from second quarter 2013. Construction and manufacturing firms had notable gains of nearly 13 percent and 6 percent, respectively. Manufacturing industry growth is a particularly positive indicator of improving economic health.
• The county’s seasonally-adjusted unemployment rate fell to 3.9 percent in September. The last time Box Elder County had an unemployment rate under 4.0 percent was August of 2008. Despite the positive trend, the unemployment rate still registers 0.4 percentage points higher than the state average of 3.5 percent.
• Although the labor market in the county picked up steam in second quarter 2014, average wages in the county continued to sputter along. Year-over wage growth equated to 0.9 percent, nearly 1 percentage point slower than the Utah rate of 1.7 percent. As the labor market gets tighter, there should be upward pressure on employee compensation, but it could be some time before consistently higher wages materialize. 
• Box Elder experienced a 15 percent decline in taxable sales from second quarter 2013 to second quarter 2014. The majority of the decline in taxable sales for the county came from adjustments for prior periods, which does not reflect normal business transactions. Excluding these adjustments from second quarter taxable sales results in a 5.9 percent increase from 2013 to 2014 (consistent with the recent growth rates).
• Year-over home sales dipped 7.7 percent in third quarter of this year according to the Utah Association of Realtors. Though the housing market has come a long way since 2009, sales across the state were flat in between the third quarters of 2013 and 2014.

364 Manufacturing Reports from Economic Census Industry Series

In recognition of Manufacturing Day on October 3, the Census Bureau presents descriptions of its wide array of data products on the manufacturing sector of the economy. Additionally, statistics on all 364 industries in the manufacturing sector are now available from the 2012 Economic Census.

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Data includes:

• 2012 Economic Census Industry Series
• 2012 County Business Patterns
• Annual Survey of Manufactures
• Survey of Plant Capacity Utilization
• Manufacturers’ Shipments, Inventories, and Orders (M3)
• U.S. International Trade in Goods
• Additional Economic Indicators

Also released is a county-level thematic map (right) showing the percentage of the civilian employed population employed in manufacturing jobs.


For more information including links, see the U.S. Census Bureau.

Employment by Major Industry

Employment by Major Industry (or Nonfarm Employment) is compiled payroll data for nonfarm workers. Nonfarm workers are all employees excluding government employees, private household employees, employees of nonprofit organizations and farm employees. DWS economists have broken these documents into county regions and are an important economic indicator of the current economic situation. For more: Why no "Farm" in Nonfarm Jobs?

Second quarter 2014 has been updated for counties in the Bear River region. These can be found on each county's page in the links to right, as well as below.

• Box Elder County
• Cache County
• Rich County

Bear River Location Quotients

Tyson Smith, Regional Economist

In the summer issue of Local Insights we discussed the value of economic diversity and the Hachman Index (a method used to measure industry diversification in the labor market)[1]. The article states that:

The Hachman Index is derived from the weighted average of the industry Location Quotients (LQ) in a region. A LQ measures the regional concentration of employment in a given industry relative to a larger geography. As a rule of thumb, an LQ of 1.2 or higher represents an industry with a relatively high concentration of regional employment, while a score of 0.8 or lower indicates sparse regional employment… Breaking the Hachman Index into individual components provides insight into the distribution of employment in a local economy.

Figure 2 in that article resembles the charts to the right, except that the data in the article was aggregated to the regional level. Combining the employment counts for all three Bear River counties obscures the concentration of employment in certain industries at the county level. This article sheds light on the relative density of employment in each county.

When examining the three charts, note the scale on the horizontal axis. In 2012, Cache County had very few location quotient outliers. Four industries were within the “normal” location quotient range, and only two industries had LQs greater than 1.2. Furthermore, the industries with above normal concentration of employment in Cache (manufacturing and educational services) registered LQs substantially lower than the highly concentrated industries in Box Elder and Rich counties.

Box Elder County had five industries in the “normal” LQ range, but three of the four high-density industries recorded LQs above 2. This means that the proportion of the workforce employed in manufacturing, transportation & warehousing and agriculture, forestry, fishing & hunting more than doubled the national percentage.

Lastly, Rich County had the lowest Hachman Index among the Bear River counties. Among the 10 industries that meet disclosure standards, only two industries had employment LQs in the “normal” range.

In Utah, there is a correlation between the size of a county’s labor force and the degree of industrial diversity in the county; in general, this means the more workers in a county the more diverse the economy of that county.  So it is not surprising that Cache County has less variance in its respective LQs compared to Box Elder and Rich counties.

Understanding the relative concentration of employment by industry lends some insight into the comparative advantages of a region. In terms of Bear River, we see that the labor economy is moderately diverse compared to other counties in the state.

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[1] Article titled: Economic Diversity in Bear River

Economic Diversity: Further Analysis of the Hachman Index

Tyson Smith, Regional Economist

In the summer issue of Local Insights we explored local area industry diversity using the Hachman Index. As stated in the article, many economists believe that economic diversification promotes stability in local markets. The article also touches on the difficulty of identifying an exact index value that denotes an appropriately diverse economy. One way to examine Hachman Index values is described below:

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“It is difficult to determine exactly what index value constitutes a highly diversified region when there are large differences in total employment [among the regions]. However, if a county’s Hachman Index ranks considerably higher than its total employment count – relative to the other counties in the state – that is an indication that the county is relatively diverse. Using this method reveals that Rich County had the fourteenth highest Hachman Index and the 27th largest employment base in the state, making it more diverse than counties of similar size. Conversely, both Box Elder and Cache’s index values ranked three spots below their total employment ranks of fifth and eighth, respectively.”

This simple comparative method highlights the correlation between the size of the workforce in a given county and the industrial diversity in that area. In general, counties with larger populations do not rely on one or two key industries for employment. On the other hand, small communities in less populous counties often exist because their region has (or had) a comparative advantage in a single industry. The relationship between employment count and economic diversity allows us to identify counties that are more or less diverse[1] than expected using the matching exercise in the chart to the right.

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[1] Counties where the Hachman Index ranks more than two spots higher or lower than the Total Employment ranking are identified as “More Diverse” or “Less Diverse”, respectively. The "two spot" difference as a means of identifying notable incongruities does not represent a scientific methodology, it is only meant to give directional insight into the data.

Long-term Industry Projections available on the web

Job seekers who make decisions based on labor trends information are more likely to see payoff for their efforts. An important aspect of career exploration is understanding how occupations and industries are expected to change. To assist in this process, the Department of Workforce Services (DWS) produces long-term industry projections every two years for the major industry sectors in Utah, providing information on the state’s expected labor demands. The long-term projections extend ten years past the base year. Using the industry projections, DWS generates occupational projections for jobs that fall into the industry categories.

To access the most recent set of long-term industry projections, click here.

New Data Available in Utah Economic Data Viewer

The 2013, Q4 industry employment and wages data has been updated in the Utah Economic Data Viewer. Industry employment and wage data is collected through the Quarterly Census of Employment and Wages (QCEW) program. The primary source for QCEW data are the reports submitted by employers to the Utah Unemployment Insurance program.

The Utah Department of Workforce Services compiles quarterly employment and wage data for non-agricultural employers in Utah. Data is maintained at the establishment level (e.g., store, plant, or other type of permanent worksite facility). Since these establishments are assigned an industry and county code, their employment and wage data can be aggregated into common industry and county groupings for analysis purposes.

Utah Employers, Employment and Wages by Size, 2013

The Utah Department of Workforce Services compiles quarterly employment and wage data for non-agricultural employers in Utah. Data is maintained at the establishment level (e.g., store, plant, or other type of permanent worksite facility). Since these establishments are assigned an industry and county code, their employment and wage data can be aggregated into common industry and county groupings for analysis purposes.

Employment and wage data for Utah’s non-agricultural employers are categorized in this publication by employment size for the month of March in each of the designated years. Grouping data by this criterion provides a useful tool to analyze the characteristics of Utah employers. For example, general trends of the size of Utah employers and employment concentrations by employer size class can be observed. Wage levels for large, medium, and small firms can also be evaluated.

In this publication, data is presented for both establishments and firms. The term "establishment" is generally defined as a specific physical worksite for an employer. For most employers, this is the actual street location at which business is conducted. For others, with no permanent worksite (such as salespeople, factory representatives, or distributors) it is the location from which they conduct their business (sometimes even residences).

For an overview of this publication and a look at your county, click here.