October 16, 2008 Cities in Recession
An interesting article in the NY Times this week included this map illustrating the recession like effects occuring in different cities across the nation. So national (and many local) leaders are still hesitant to use the word “recession”, but according to this map a number of cities are definitley feeling a recession…including a few metropolitan regions here in Utah. The article states:
According to an analysis by Moody’s Economy.com released last week, about two-thirds of the country’s 381 metropolitan areas were in recession, and another one in five was at risk.
The report evaluates employment and industrial production data for the six months ending in August – so it doesn’t reflect deteriorating conditions caused by the financial upheavals in September. But other news did: on Friday, the government said the economy shed 159,000 jobs in September, the worst monthly tally since 2001 and the ninth consecutive month of job losses.
Also according to an article in Business Week cities with “a strong presence in health care, education, law, energy, and the government will feel the impact of the downturn less.” So basically capital cities and college towns are best equipped at dealing with a recession. You can read this BW article here: Some cities will be safer
So what does this mean for Utah cities and towns? The first thing is to know and understand your local economy…for example, what are the major businesses in your community and how are the affected by the economic downturn. How is your community affected by the residential construction slowdown? What about job growth? All of these factors are important in determining the fiscal health of your city…especially in being able to assess what will happen to sales tax revenue. Right now it looks like taxable sales in Utah for 2008 will be down 5%. But of course each city and town is a little different.
Also, Doug Macdonald (ULCT economic consultant) recently presented a summary of the economic conditions nationally and locally. This presentation will also be made at our Monday (October 20) LPC meeting in North Salt Lake. But you can view a pdf of the presentation here: Utah Cities Economic Outlook 2008-09.