November 16, 2011 How are Economic Forecasts for 2012 Shaping Up?
Recent data from local sales tax distributions and taxable sale from the Tax Commission paint a Utah economy that is shifting into second gear. This was confirmed by the Commerce Department third quarter GDP report, which estimates that sales and services grew 2.5%. In Utah, taxable sales are 5% to 6% ahead of last year’s levels. Utah consumers, at least those who have steady incomes, have put off buying new cars and trucks since the financial crisis in 2008. So recently some of that pent-up demand was unleashed. The latest taxable sales figures from the second quarter of 2011 indicate that motor vehicle sales were up 25% (see table). Apparel store sales were up 11% in the second quarter. Apparently, those consumers with steady incomes are replenishing their F-150s and clothing wardrobes.
Behind the increased spending on autos and clothes is a job market that is shifting into second gear. Following the 5% decline in 2009 and a 0.6% drop in 2010, Utah job growth will range between 2.2% and 2.5% in 2011. In fact, the August and September increases in job growth in Utah were up 2.9% and 2.8%, respectively (see chart below). Hot sectors, increasing 3% or more so far through September 2011 were: natural resources & mining (+6.2%), manufacturing (+5.7%), professional and business services (+7%), and leisure and hospitality services (+4.2%). Construction and government employment, which fell 0.4% and 0.8%, respectively, dragged down job market growth in September 2011.
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