NY Times: Once Immune, Utah Is Feeling Economic Dip

[marmar]

By KIRK JOHNSON
Published: February 24, 2008

SALT LAKE CITY — In the economic boom that thundered through Utah over the last few years, many people saw a kind of perfect chemistry at work.

What demographers call Utah’s special story — its population is the youngest in the nation by far and one of the fastest growing, mainly from large Mormon families — was paying off, melding with a surging engine of growth in Utah’s backyard and throughout the world.

Between November 2006 and November 2007, Utah created more jobs than Pennsylvania, a state five times the population. Construction spiked at the same time as a giant wave of 20-somethings — another wrinkle unique to Utah, a baby boom echo long after the rest of the country’s — entered the worlds of work, housing and family.

But economists, employers and residents now say the very forces that made Utah roar — in the types of jobs that grew, especially construction and manufacturing — also pulled the state more firmly into the national and global economic web. And some of the distinctive traits that looked like strengths, like the low numbers of retirees, now seem like chinks in the armor. Retirees, who have flocked to places like Montana and Idaho, are likely to have interest and investment income to spend no matter what happens, while wage earners, who dominate Utah’s economy, could suffer in a downturn.

Utah’s unexpectedly sharp knock is a reminder of how global and local are intertwined and how delicate the balance can be.

“We’re no longer insulated,” said Pamela S. Perlich, a senior research economist at the University of Utah. “Utah still has a special story, but it got blurred by the engine of economic growth.”

Even as the rest of the nation’s economy began stumbling last year, Utah’s immunity seemed secure. The global shocks to housing, credit and the stock market would remain distant echoes, many economists said. The dismal picture of boarded-up, foreclosed houses that can be seen in places like Las Vegas or Riverside, Calif., would not happen here, business leaders said with a touch of smugness, because Utah, marching to its own fiscally prudent drummer, had not overbuilt.

But in December, the number of single-family housing permits issued here fell 32 percent, the steepest one-month decline since 1980, and sales of existing homes plummeted, off nearly 34 percent in the fourth quarter of last year — the sixth worst record in the nation, according to the National Association of Realtors.

Job growth projections for 2008 were recently cut by a third, in the state’s own analysis, to 2 percent from 3 percent or more only a month ago. New housing starts are expected to fall nearly 60 percent in Utah in 2008, a worse hit than Nevada or Arizona, which have become national symbols of the housing mess, according to a recent national forecast by Moody’s Economy.com. .....(more)

The complete piece is at: http://www.nytimes.com/2008/02/24/us/24utah.html?_r=1&hp&oref=slogin