State of Utah Michae 0. Leavitt, Governor Second Printing Governor's Office of Planning and Budget January 1996 116 State Capitol Salt Lake City, UT 841 14 STATEOF UTAH MICHAEL 0.LEAVITT OFFICE OF THE GOVERNOR OLENE S. WALKER GOVERNOR SALT LAKE CITY LIEUTENANT GOVERNOR 841 14-0601 January 8, 1996 My Fellow Utahns: I am pleased to accept this annual report on Utah's economic performance. I want to thank the State Economic Coordinating Committee for preparing this careful assessment of the past year and helping to develop and disseminate a consistent foundation of economic data and analysis. As I have met with state economists and reviewed the economic data, I am impressed and humbled by the prosperity of the era. The Economic Coordinating Committee has aptly characterized the past several years as a golden period for the Utah economy. These are the best of times. We celebrate our centennial year with low unemployment, rising incomes, and a budget surplus. And while some would credit Utah's economic performance to good fortune or timing -- and there is some of this -- I know the explanation runs deeper. The explanation is found in our people. The productivity of Utah's workers, the wise investments of Utah's entrepreneurs, the first-rate performance of Utah's teachers, the success of Utah companies in the global economy, and the prudent choices made by Utah's leaders are just some, of the many, explanations for our economic accomplishments. I congratulate the residents of this state for their contributions to our collective economic success. During 1995, we survived the Base Realignment and Closure Commission's decisions, learned that Salt Lake City would host the 2002 Winter Olympics and permitted construction for $2.9 billion in projects. More issues will impact us during 1996. The restructuring of the federal government already is, and will continue, to affect our economy. Growth will continue to be a dominant issue. And, seeing that the benefits of Utah's current economic abundance are extended to all segments of society is another major challenge. I welcome the feedback of all Utahns as we confront these and other issues. Thank you for this opportunity to provide public service. I look forward to the coming year. Sincerely, A Michael 0. Leavitt Governor -& Preface The 1996 Economic Report to the Governor is the culmination of months of work by the State Economic Coordinating Committee to monitor the economy, gather data, analyze trends, and forecast the future. The ultimate purpose of this document is to build consensus among the state's economic community so that decision-makers can make judgements based on a consistent foundation of economic data and analysis. The Economic Report has been published annually since 1986. This year's report is the Centennial Edition and includes a general discussion about long-term projections and the planning process. A special chapter on Utah's economic history has also been included. Other chapters focus on the national and state outlook, economic development activities, economic indicators, and selected industries. Since the Economic Committee authors this report in December and there is often a quarter or more of lag time before economic data become final, much of the data for 1995 is a preliminary estimate based on the most current data available as of December 8, 1995. Revised and final estimates can be obtained from the contributors to this Economic Report. The membership of the Economic Coordinating Committee includes representatives from the following organizations: Governor's Office of Planning and Budget Utah Department of Employment Security Utah State Tax Commission Utah Department of Natural Resources Utah Department of Community and Economic Development Legislative Fiscal Analyst's Office Utah Foundation Bureau of Economic and Business Research, University of Utah Economics Department, Utah State University Department of Economics, Weber State University Department of Managerial Economics, Brigham Young University First Security Bank Key Bank The Economic Report can be obtained electronically through UTAHNET--the State of Utah's Online Bulletin Board Service--by calling (801) 538-3383 or (800) 882-4638 and joining the conference for GOPB On-Line. Portions of this report are also available on the Governor's Office of Planning and Budget World Wide Web homepage at www.state.ut.us/. Paper copies are for sale for $1 5.00. Contact the Governor's Office of Planning and Budget, Demographic and Economic Analysis section, to obtain copies or receive help with inquiries about the Economic Report at 1 16 State Capitol, Salt Lake City, Utah 841 14, (801) 538-1036. i? Preface Tables Contributors Executive Summary ........................................... Economic Outlook * NationalOutlook .................................................................... 19 A I UtahOutlook ....................................................................... 23 ii Utah's Future.. The Long View ......................................................... 29 Economic Development Activities .............. Economic indicators ft- Employment. Wages. Labor Force ............... ii Personal Income .............................. it- Gross State Product ........................... ii A Demographics ............................... ii Social Indicators .............................. Prices. Inflation. Cost of Living ................... G International Merchandise Exports ................ a Gross Taxable Sales .......................... ii M Tax Collections ............................... RegionalINational Comparisons ................. Industry Focus ii Agriculture ........................................................................ 157 AI ConstructionandHousing ........................................................... 167 AM DefenseIAerospace ............................................................... 177 ii EnergyandMinerals ................................................................ 189 iL HighTechnology ................................................................... 205 Tourism, Travel and Recreation ...................................................... 207 Special Topics ii I UtahEconomicHistoy .............................................................. 217 Meeting the Challenges of Growth .................................................... 243 Appendix ..... Contents Executive Summary A . Employment Growth by State: October 1994 to October 1995 ....................................................... 5 B. UtahJobGrowthByIndustry: 1994to1995 .................................................................... 5 C . Value of New Construction: 1970-1995 ........................................................................ 6 D. NetMigrationInUtah: 1955to1995 ..........................................................................6 E. Employment Growth Rates--Total, Private Sector, and Public Sector: 1995 ............................................ 8 F. Utah Economic Indicators-AnnualPercentage Change: Actual, Estimated, and Forecasted ............................... 8 G . Utah Per Capita Personal Income as a Percent of U.S .. 1969 to 1995 ................................................ 9 H. Utah Nonagricultural Average Monthly Wages: 1986 to 1995 ....................................................... 9 Utah's Future.. The Long View 2 . Historical and Projected Population Increases. Components of Change: 1970 to 2020 ................................... 38 2 . Employment by Industry Share..U.S . and Utah: 1990 and 2020 ..................................................... 39 3 . Utah Population.. History and Projections ...................................................................... 40 4 . Cumulative Migration: 1995-2020 ............................................................................ 41 Employment. Wages. Labor Force 5 . U.S. and Utah Unemployment Rates: 1950 to 1995 .............................................................. 61 6 . Utah Nonagricultural Employment: 1955 to 1995 ................................................................ 62 7 . Utah Nonagricultural Employment-. Annual Percent Change: 1955 to 1995 ............................................ 62 8 . Percent of Employment in Goods-Producing Industries: 1970 to 1995 ............................................... 63 9 . UtahandU.S.EmploymentbyIndustry. 1994 .................................................................. 63 10. Utah Nonagricultural Average Monthly Wages: 1986 to 1995 ...................................................... 64 11. Utah Average Annual Pay as a Percent of U.S .. 1976 to 1995 ..................................................... 64 12. Utah and U.S. Labor Force Participation Rates: 1994 ........................................................... 65 Personal lncome 13. Utah Per Capita Personal Income as a Percent of U.S.. 1969 to 1995 ............................................... 78 Gross State Product 14. Utah Gross State Product.. Percent Share by Industry: 1965 and 1992 .............................................. 84 15. U.S. Gross State Product.. Percent Share by Industry: 1965 and 1992 .............................................. 84 Demographics 16. Utah Population.. Annual Percent Change: 1953 to 1995 ......................................................... 93 17. Components of Utah Population Change.. Net Migration and Natural Increase: 1954 to 1995 ............................. 94 18. Total Fertility for U.S. and Utah : 1964 to 1994 ................................................................