By Rette Speight
Utah is following the nation’s downward spiraling economy: just not as steeply.
As of February, Utah’s unemployment rate was about three-percent. Last year during the same month, it was 2.4 percent. Compared to the nation’s unemployment rate of 4.8 percent and 4.5 percent respectively.
“Even compared to the low Utah rates, Utah County is considerably lower than the state concerning unemployed individuals,” said Steve Densley, president of the Provo/Orem Chamber of Commerce. “There are lots of ‘for hire’ signs that haven’t been filled for quite awhile.”
But for graduating students looking to find “the perfect job” outside of Utah County, the ideal job might be harder to find, Densley said.
“If you want to be the CEO of a company straight out of college, that job might be harder to find,” he said. “Anyone willing to work their way up through companies shouldn’t have any difficulties finding jobs.”
Densley said that with the current generation, college graduates stand on the steps and proclaim, “world, here I come!” when in fact, there are thousands of others in their same situation.
“It’s a much different ballgame when you actually have to sit down and work,” Densley said.
Jeff Thredgold, president of Thredgold Economic Associates, claimed on his Web site with others that the state’s economic performance continues to be one of the nation’s strongest, although they are still expecting some slowing for the rest of 2008.
In the most recent spring release by Zions Bank, Thredgold said that the state’s current employment growth is the weakest since 2003.
Kendall Oliphant, the senior vice president of Thredgold, said that Utah is simply taking its turn on the top.
“This is cyclical… We’ve had times when we were the worst performing,” he said. “Just a few years ago Nevada was the leading state. They really have been impacted by the housing crisis and now they’re on of the worst.”
In their spring outlook, Thredgold said that Nevada and Arizona both are “dealing with painful corrections from excessive home building and home price appreciation.”
Mark Knold, with the Utah Department of Workforce Services, said that the state’s construction boom can be blamed for the souring economy, but also has been held responsible for the “turbo-charged” economy we’ve been seeing recently.
The current release by Thredgold Economics states that “thousands of Utah consumers and companies are being whipsawed by domestic and global credit markets that have gyrated wildly” during the past year. “Lenders aplenty were available… to finance just about anything,” but as both Thredgold and Knold identify, sub-prime mortgages have become a problem.
“The truth is, is that construction is shutting down housing sales, they’re in a financial crisis,” Knold said. “You just can’t buy a home if you can’t find the money to pay for it.”
In the Thredgold report, such loans as mortgages are “critically important” and are being held responsible for Utah’s slowing housing market, since Utah has an “excess” of homes priced above $500,000.
In direct connection with the housing market Knold said, is the financial sector not just including house mortgages. This is causing a statewide “back-off” and “slow down,” which isn’t always good for the graduating college class of 2008.
“There’s just not a strong demand… for college recruits,” Knold said. “But timing is everything. They just happened to graduate in this dip in the chart. We’re in a one to two year slow period; if they can just ride it out they should be just fine. It’s just their bad luck to be in this part of it.”
Because companies haven’t been hiring as many graduates as in past years, some students are opting to go into careers completely different than what they have been studying for the last five years.
TWG Insurance has been recruiting graduating students in anything involving business, communications and humanities, said recruiter Matt Shumway.
“Basically we just exclude things,” he said. “Like engineering, anything science related. They’re not looking for us and we’re not looking for them. But we take resumes for anybody else with over a 3.5 GPA.”
The popularity of TWG has grown, as they hired four of 45 applicants during the fall semester and offered 11 positions out of 70 winter applicants.
Still, Thredgold Economics remains hopeful for the state market stating on their website that although the economy is slower than it previously was, we can still look forward to “solid growth, impressive but slowing job creation, … tight labor availability and a softer housing market seem on tap for Utah in 2008.” Even with the cooling however, they predict the state’s long-term economic potential “second to none.”
In their spring 2008 release, Thredgold estimated that Utah had still added approximately 28,000 new jobs during the past 12 months, which equals a 2.3 percent growth rate.
“One of the few no-brainers in the American economy today is the high value of education,” Thredgold said in their current release. “…Workers without adequate education are equivalent to boxers with one arm tied behind their backs.”
