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SALT LAKE CITY — To say Gov. Gary Herbert is brimming with optimism about Utah’s economy would be an understatement.
By just about any measure, 2014 was a good year for Utah’s economy, according to the Utah Economic Council’s “2015 Economic Report to the Governor.”
And 2015 portends to be better, "barring any major disruptions to global and national economies," according to the report produced by the University of Utah's David Eccles School of Business and the Governor's Office of Management and Budget.
Utah job growth is expected to increase 2.5 percent in 2015, well above the anticipated national increase of 1.8 percent.
Meanwhile, the state’s unemployment rate is expected to hold steady at 3.6 percent.
Expenditures related to the rebuild of Salt Lake City International Airport are expected to reach $20 million per month by the end of 2015.
Personal income, taxable sales and tax collections are all on the upswing, the report says. Herbert noted that state government's Rainy Day fund has been restored to pre-recession levels.
“What’s not to like?” said Herbert, addressing the Salt Lake Chamber’s Utah Economic Review on Friday morning.
A panel of economists was equally ebullient when asked by Natalie Gochnour, associate dean at the David Eccles School of Business, to briefly describe their predictions for 2015.
"Cresting," said Stephen Kroes, president of the Utah Foundation.
"Broader opportunity," said Tom Maloney, chairman of the U. economics department.
"It's going to be a good year," said Darin Mellott, a senior analyst at CBRE, a global real estate services and investment company.
But the report also spotlights some challenges for the state and the nation.
While unemployment has dropped nationally and to lower levels in Utah, wage growth has been sluggish and is a cause for concern, the report says.
"Should sluggish wage growth continue into the new year, the state could likely hit a tipping point where above-average growth will not be sustained without stronger consumer demand from Utah’s 1.3 million wage and salary workers. Should wage growth accelerate in the early months of 2015, Utah may experience another year of average or above employment growth," the report said.
The report also notes a slow recovery for residential construction in Utah in the aftermath of the Great Recession.
"Typically, four years after the trough, construction has recovered to about 80 percent of the pre-recession peak. In the current cycle, however, the recovery is only about 50 percent of the pre-recession peak, 11,600 single-family homes in 2014 compared with 21,000 in 2005, despite historically low mortgage rates, the report said.
The recent drop in oil prices will have positive and negative implications in the coming year, according to the report.
Corresponding declines in motor fuel prices give consumers more disposable income they can save or spend on other things. But Utah economists also note that Wasatch, Duchesne and Uintah counties led the state in percentage of population change. The economies of those counties are largely dependent on energy development activities.
While Utah has one of the lowest poverty rates in the nation, a sizable number of poor Utahns have not shared in the state's economic bounty, the report said.
Approximately 10 percent of Utahns lived in poverty from 2011 to 2013.
"There are high societal and economic costs of allowing generations of families to remain in poverty. This jeopardizes not only their future but the state’s future in lost human capital, should it fail to implement programs and policies designed to end the cycle of poverty for Utah children. The data related to families caught in the cycle of poverty and welfare dependence demonstrate that there are significant barriers beyond income that jeopardize their ability to emerge from the cycle," the report said.
