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Show 8 ' The Salt Lake Tribune Sunday February 19, 1984 DESERET news, SUNDAY, FEBRUARY i 9, 1984 Utah economic growth to continue Accelerated growth in most major industrial segments of Utah is predicted in 1984 by ft--. Kelly K. Matthews, vice president and economist for First Security Bank of Utah. While Substantial economic progress was recorded in 1983, we anticipate an even stronger performance this year, says Matthews. Not all of the recession scars are completely healed, but certainly a general feeling of optimism underscores our analysis and forecast for economic growth in Utah in 1984. Utahs index of leading indicators recorded steady improvement throughout 1983. This index, which we publish each quarter in the First Security Newsletter, is comprised of nine sensitive statistical time series which, in the past, have been particularly reliable forerunners or indicators of change in the business cycle, giving advanced notice of both an Impending economic decline and a forthcoming recovery. The impact of inflation and seasonal variation is removed from these indexes to enable analysis to focus on the real change in the economy. As of December 1983, Utahs index of leading indicators had e reached an new high. The index stood at 177.6, an increase of 6.3 percent above the December 1982 all-tim- level Population growth in Utah in expected to return to a more normal growth trend. In 1983, the states population was 1.587 million, an increase of 27,500 or 1 34 percent A net natural increase of 32200 was partially offset by a net outmigration of 4,700 people. This year a population gain of 40,000 is anticipated. Matthews discusses Utahs 1984 outlook in four geneial areas: Income: As we forecast a year ago, personal income in Utah in 1983 totaled $14.8 billion, an increase of 7 34 percent slightly above the 7.3 percent recorded in 1982. Hourly wage gains of the typical employee increased about 412 percent in 1983. Beal spendable earnings, which adjusts for number of hours worked, higher inflation and higer taxes, increased 1 12 percent in 1983, following four consecutive annual declines in the average workers standard of 1984 is living. "With improved in profitability the corporate sector in 1984, the average Increase in hourly wage rates may be slightly higher while the growth rate in personal income should also accelerate. Total personal income is expected to increase percent in 1984, while the average wage gain likely will edge higher to a 5 12 percent range. Whith the expected rate of inflation near 5 percent, the real purchasing power of the average hourly wage in 1984 may be essentially flat In the second O Employment: half of 1983, Utahs labor market took a major step in reclaiming jobs lost during the recession. A recent revision in employment statistics by the Utah Job Service reveals a much stronger employment growth in the second half of 1983 than previously employreported. ment averaged 565,000 last year, an increase of 5,000 jobs or 1 percent This is an example where the average is somewhat misleading. Early in 1983, nonagricultural employ 9-- 5-- al ment was running 5,000 jobs below the previous year. By December 1983, however, the number of jobs in Utah had surged to a gain of 22,000 above a year ago. Major employment increases were recorded in the construction, manufacturing, financial and retail trade industries. At year-enemployment in the mining industry still was 800 jobs below a year ago. The unemployment rate in Utah dropped to 6.1 percent in January 1984 an amazing decline from the 8.8 percent prevailing as recently as May 1983. The annual average rate of unemployment for 1983 was 7.7 percent "New employment opportunities in Utah are forecast to be sharply higher this year. Nonagricultural employment is expected to increase by 20,000 jobs or 3 12 percent This certainly is realistic as nonagricultural employment totals since November have exceeded year-earlilevels by 21,000 jobs. Growth in defense-related employment will continue strong. Hercules Corp. has announced a $200 million expansion to faciltiate the development of graphite products and engines for the new Trident II missiles. Related gains in employment at Hercules could reach 1,160. Thiokol recently was awarded $220 million over six years for work on the space shuttle motors. A $90 million construction program has begun to prepare Hill Air Force Base for its logistical support for the MX missiles. In the electronics area, an expansion by National will increase the employment by several hundred jobs, while Select Telephone Systems has pruchase the GTE facility for telephone repair and maintenance operations and will employ up to 2,000. Construction on the Intermountain Power Projects first and second units will proceed in 1984. Employment at this $5.8 billion project reached 2,300 flast yhear and is expected to reach 3,500 percent in dollar value. A typical residential real estate property probably increased in value in 1983, but the appreciation was less than 5 percent Utahs mineral industry continued to be adversely impacted in 1983 by low commodity prices. In Utahs coal industry, 11 of the 22 mines are closed and the mines producing are operating at reduced levels. Coal production in 1984 will be near 12 million tons, unchanged from 1983, but 32 percent below 1982. Coal prices were essentially flat in 1983, remaining right at the bottom of the recessionary range. 20 d, Semi-Conduct- in 1984. Unemployment in Utah in 1984 is Additionexpected to average 5.5-6al reductions in the jobless rate will be achieved at a slower pace this year. The labor force will increase more rapidly in 1984, as discouraged workers, who previously dropped out of the force, reenter the job market and are counted among those seeking work. Production: Residential construction activity in Utah recorded major gains in 1981 Statewide, there were 14,664 permits for new dwelling units issued in 1983, an increase of 19 percent above the 1982 total Despite the decline of 27 percent in .0 On a positive note. Geokinetics Inc. and the UK. Synthetic Fuels Corp. agreed to terms for $45 million in price and loan guarantees over a 10 year period for the development of Geokinetics Seep Ridge Shale Oil project nonresidential construction value, total building permit construction value in Utah during 1983 was $1.1 billion, up 16 percent from 1982. In 1983, the Sheraton Hotel was opened and the Triad Centers first phase is about 75 percent complete. John Price Industries will break ground on April 6for the first phase of City Centre, a $100 million development in Salt Lakes downtown Block 53. In the next few weeks, Stouffer Foods corp. will break ground for a $75 million frozen prepared food plant in Springville. Over the past few months, mortgage rates have eased modestly. Presently, FHA mortgage rates are quoted at 12 12 percent with 3 discount points and conventional mortgage rates are near 13 14 percent Mortgage rates could slip and additional 12 to 1 percentage points by mid-yea-r. In the second half of 1984, however, mortgage rates may again be edging higher. We expect that adjustable rate mortgages will be utilized on a much wider scale in Utah in 1984. These instruments, which are very popular in other areas, have a lower initial mortinterest rate than fixed-rat- e gages. In subsequent years, the rate is adjusted below a ceiling range to reflect chages in market rates of Copper pc. udction in Utah at metric tons in 1983 was essentially unchanged from the previous year, while production value in 1983 totaled $305 million. Engineering studies are continuing on the $400 million moderization and expansion project being propsed by Kennecott 190,000 Copper. Some tax incentives enacted in the recent Utah Legislature should be a plus in the final decision regarding the proposed project Copper prices currently are near 62 cents per pound, significantly below the cost of production. Copper Produc- - 1pc J GOMRlDT 7j The tourist industry is expected to remain a strong component of Utahs economy in 1984. Passenger activity at the Salt Lake International Airport in the second half of 1983 increased 4 percent Western Airlines passengers accounted for 50 percent of the totaL CONCLUSION: We believe economic recovery, in most industrial segments, will continue in Utah in 1984. Major gains will be recorded to employment and income. when they need service & repair YOU SHOULD TOO! NEW & USED EQUIPMENT AUTHORIZED SERVICE STATION Budget Hoists Sales and Service Wright Overhead Cranes Milwaukee Tool Corp. Lincoln Motor Sales & Service Baldor Electric Motor Sales and Service v & PARTS FOR: Ridgid Tool Company Newman Motor Dayton Motors G.E. Sales and Service Coffing Hoists Service WanlassHigh Efficiency Rewinding Marathon Motors Commerciallndustrial Wiring & Trouble Shooting J o o oAtim ELECTRIC & t-O- 42-522- Sales Consumer spending in Utah improved during the second half of 1983. Gross retail and service sales tax collections during the first seven months of fiscal 1984 were 5 percent above last year. In the retail sector only, sales in the third quartei in Utah were up 11.9 percent compared to a 11.3 percent gain nationwide. We believe consumer buying and borrowing will continue tc strengthen in Utah in 1984. The number of automobiles and trucks sold in Utah during the third quarter of 1983 was up 27 percent We expect automobile sales in Utah to show additional gains in 1984. Newspaper Agency Calls US Residential building permits are expected to reach 15,500 in 1984, a gain of only 5 percent Plans for at least two major apartment projects, with about 1,000 units in each, have been announced for construction in the Salt Lake area in 1984. "Residential real estate sales in the Salt Lake multiple listing area totaled 5,286 properties in 1983, an increase of 18 pecent in number and I Last year, Utahs oil and gas industry completed 402 wells, a decrease of 27 percent from 1981 In the first nine months of 1983, petroleum production from 1,340 oil wells was 27 percent above the previous year. The interest 7T BYaDAYIWEEKLORMONT tion and exports from less developed countries continue to flood world markets and depress copper prices. TOR REP Ain South 300 West, Salt Lake City 434-43Power Toot Repairs (Alt Makes) &t 1455 South 300 West 1 465 25 |