Friday, August 15, 2014

Beyond Recovery

Carrie Mayne, Chief Economist

In November of 2012 Utah had finally crawled out of the job deficit hole created by the Great Recession. The full volume of job loss, roughly 79,000 was gained back by that time and since then our economy has grown by another 75,000 jobs. The contraction took roughly 21 months to play itself out, and recovery occurred over the next 30. Since then, job growth rates have been strong and employment expansion has happened across the full spectrum of business sectors.

Utah’s Great Recession story has been told many times, but what may be news to some is that the recovery hasn’t played out equally in all the different employment industries. Of the 17 private sector industries, eight of them followed a similar pattern as the full job market: recession, recovery, and now expansion. The Natural Resources and Mining industry, thanks to strong oil and gas markets, has just recently returned to its pre-recession employment level. Three industries were blind to the recession and experienced no job losses: Education, Health Care, and Arts, Entertainment, and Recreation.

Despite strong job growth as of late, five industries still show net deficits compared to their pre-recession peaks. Three of the five (Construction, Finance and Insurance, and Real Estate) have clear ties to housing and were likely overheated prior to the recession. As such it is no surprise the employment levels in these industries have not returned. Due to significant structural changes that occurred before and during the recession, Manufacturing is also in a job deficit that will likely not fully recuperate given the new industry conditions.

So while job growth accelerates and the Great Recession has become distant memory for the Utah economy, there are some devils in these details that help us appreciate that not all things are equal in the state’s job market.

Click graph to enlarge

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