Friday, February 17, 2017

What happened to Utah's construction workers?

The Fall and Rise of Utah’s Construction Industry
What happened to construction workers?

By Lecia Parks Langston, Senior Economist

"It is not the strongest or the most intelligent who will survive but those who can best manage change.” –Charles Darwin

The pre-Great-Recession economic boom was built on the back on the construction industry. In Utah and across the nation, a speculative housing-price bubble resulted in a huge demand for construction workers. However, once that bubble popped, many construction personnel were left without employment. What happened to that workforce? And once expansion returned, where did the building industry find a replenishing supply of employees? While a notable number of construction workers experienced a spell of persistent nonemployment during the recession, many found jobs in the construction industry as well as other industries. Still others moved to nearby states for employment while a smaller number moved even farther afield. When the industry began expanding again it drew workers from the same industries that had hired separated construction employees during the recession. In turn, states which had attracted separated construction workers were typically those which fed Utah construction hires on the upswing.

To read the entire study, click "Read More."

Tuesday, February 14, 2017

Better, Faster, Smarter... Check out our new website design!

Go to: JOBS.UTAH.GOV/WI to check it out

Information is the treasure of the current age. The instant access to information since the advent of the Internet has transformed societies in ways that thousands of years prior had not. Information can lead to knowledge, and — with increased knowledge — better efficiencies and way of life. If information is vital, then the presentation of information has also risen to a prominent level. With this, the Utah Department of Workforce Services has made some organizational improvements to its economic webpages. Various economic data categories are not mutually exclusive, but we made an effort to compartmentalize economic data for a better organizational display and navigation. We also added a new feature area that taps into various national data elements and measurements from the Federal Reserve Economic Data (FRED), the database of the Federal Reserve Bank of St. Louis. FRED’s added value is national — and Utah — economic indicators. More on FRED’s contribution below.

Depending on the subject, economic data can be categorized as either broad or specific. For example, the demographic makeup of an area and how that impacts an economic structure is a broad-subject approach. Conversely, a current monthly snapshot of the Utah economy, its job growth and unemployment rate is a more specific observation. Our economic webpage has four “portals” through which to “categorize” and search for information. One portal is broad, while the other three are more specific in nature.

Topic Portals

The monthly employment profile just mentioned is a specific topic and gets its own “portal,” entitled Employment Update. Here, the most current Utah economic performance can be explored and summarized. The information found here is what often gets cited in the local news media in reference to the current Utah job performance and unemployment rate.

The second specific “portal” is labeled Local Insights. This is a quarterly profile of the Utah economy down to a county level. Each county is summarized with its own economic performance, including job growth, unemployment rate, housing starts, taxable sales and other profile variables. The common theme here is a county-specific approach.

The third specific “portal” is Reports and Analysis. Workforce Services’ economic forte is the labor market. Things over and above the everyday reporting on the labor market are presented here. Sometimes we do special economic studies, other times we will report on specific economic groups within the labor force, like women or veterans. Anything we do that is not an often repeated or ongoing report are grouped here.

The final “portal,” and possibly the one that will be most used, is labeled Economic Data. The core of our data collection and analysis is concentrated here. Employment data, occupational data, wage information and demographic profiles are just some of the major economic themes found in this area.

FRED's on site

As mentioned earlier, we have added an economic indicator area tapping into FRED, which is a massive compilation of economic data from various sources — primarily government statistical agencies, but also some nongovernmental organizations. Workforce Services economists have gone through the list and selected a handful of the most useful data series for gauging the performance of Utah’s macro economy and gaining insights into expected trends. Utah functions within the national economy, so the national economic indicators profiled here are intended to also be guiding influences on the Utah economy. These indicators include composite indexes; a recession probability indicator; leading indicators, such as construction permits and the yield curve; coincident indicators, such as real GDP and employment; and price indicators, such as the consumer price index, regional housing prices, and oil and gas prices. Each chart has a detailed description of what the data represent and how they may be useful.

Keeping relevant with the fast-changing pace of the Internet and data presentation is our goal at Workforce Services. We hope these changes help to better present our broad package of economic data offerings.

Thursday, December 15, 2016

The Efficiency of Manufacturing

Mark Knold, Supervising Economist

During the recent U.S. presidential election, Mr. Trump shined a spotlight upon the American manufacturing industry. A big part of his “Make America Great Again” motto had behind it the idea of returning manufacturing employment to the more pervasive levels of three or four decades ago.

An interesting footnote is that while manufacturing employment has slipped over the decades, manufacturing output has not. In real terms (i.e., adjusted for inflation), manufacturing output is as high as it has ever been. Fewer and fewer workers are putting out more and more product, as outlined in this recent article in the MIT Technology Review.
That same manufacturing phenomenon is seen here in Utah. Unlike much of the rest of the nation, Utah is fortunate in that manufacturing employment has been able to remain at a relatively even level. But while manufacturing employment levels may not be much different now than they were in 1997, Utah manufacturing output in inflation-adjusted dollars is nearly twice as high as it was in 1997. In other words, the same amounts of workers are producing twice the value of product.

Yet, while Utah’s manufacturing employment is largely the same as 20 years ago, most of the rest of the economy has grown in relation to manufacturing. Manufacturing’s share of total Utah employment has declined from 12 percent in 1997, to just over 9 percent in 2015. Conversely, manufacturing’s percentage of overall statewide real Gross Domestic Product (GDP) — the value of the goods and services produced — has increased from 10.5 percent to 11.5 percent.
In terms of the threat to manufacturing jobs, relocating out of the country is not the most impactful issue. Instead, it is productivity gains. Technological advancements and automation are the main displacers of foregone manufacturing jobs. Those are trends destined not to reverse.

Manufacturing is often divided into two segments: 1) durable goods and 2) nondurable goods. Durable goods are products whose shelf live is to be three years or greater. Conversely, nondurable goods have a shelf life less than three years. Examples of durables are cars, trucks, computers and appliances. Nondurables would include foodstuffs, paper, cloth and chemicals. The production of nondurables is a bit more labor intensive than durables, yet both have seen increases in output per worker across time. The durables side has experienced more striking output gains than has the nondurable side. In Utah, durable goods employment is double that of nondurable employment.