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Show Economic Future Still Rocky ' By TOM BUSSELBERG Sunset Editor SALT LAKE CITY Thanks to some major business moving into the state last year, the recession's impact was cushioned but the rocky road will continue, with more marked release anticipated for the year's second half. THOSE predictions are part of the University Uni-versity of Utah's Bureau of Economic and Business Research report, "Utah: An Economic Eco-nomic Review and Outlook" just released. It talks of a "modest but clearly discernible discerni-ble recovery" for the state and nation in the view of Economist R. Thayne Robson, director of the bureau. "ALMOST EVERY sector of the Utafi economy should experience improvement," improve-ment," he writes, "with the most significant signifi-cant changes appearing in construction, retail re-tail sales and for such commodities as copper." The defense and service sectors will see "significant" growth while mining and agriculture agri-culture will "likely remain relatively static for the year." GOOD NEWS should be in store for employment, em-ployment, personal income, tax collections and construction volume in 1983, he adds. Noting Utah has traditionally led in the national recovery in times past, Dr. Robson says if that happens again, citing recent unemployment un-employment declines that may trigger such a recurrence, "it will be due to rising defense de-fense expenditures, a good year in skiing and tourism, a recovery in retail trade, an improvement in home building and the continuing con-tinuing growth and vitality of Utah's unique growth sector." HE FORECASTS an increase of 10,000 new jobs while unemployment will hover around eight percent over the year. Personal Person-al income can be expected to increase by eight-nine percent. Twelve-thousand new dwelling units should see construction start while state tax revenues, other than the highway trust fund, can be expected to nudge up by six percent in fiscal 1983 (ending June 30), and 10 percent for fiscal 1984. "ALL OF Utah's industries will do better in 1983 than in 1982 with the possible exception excep-tion of mining and agriculture," Dr. Robson predicts, while government employment should remain about "constant" along with increases in education offsetting some state and local government employment reductions. reduc-tions. Breaking down anticipated performance into sectors of defense, construction, prim ary metals and manufacturing, he points to difficulty in translating defense spending into employment in the state, noting a time difference between contract awards and actual spending. SOME encouraging statistics are cited, though, such as an increase in prime contracts con-tracts from $334.4 million in fiscal year 1980 to more than a half billion dollars in fiscal 1981. Awards from NASA also went up by $30 million to over $100 million in fiscal 1981. Defense employment rose in 1982 by 500 jobs around the state, Dr. Robson notes, with the military missions at Utah's three major military bases seeming "more likely to expand" after a decade of slow declines. REFERRING IN construction to the "very dramatic" financial impact on home building in the state, he recounts how the number of permits issuedduring 1982 is estimated esti-mated at 7,600, down by nearly 2,000 from the previous year, vs. 23,000 in peak 1977. Nonresidential construction measured by total valuation should be up about 10 percent per-cent in 1982 over 1981 but total construction activity measured by dollar valuation during dur-ing the two recent recession years of 1981 and 1982 will stand at about $960 million each, "well below the $1.2 billion peak of 1979. "THE OUTLOOK for construction activity activ-ity for 1983 appears very strong for power plant construction and road building, while improvements in home building will be 60 percent above 1982. Road building in completing com-pleting the Interstate and in repairs could be above 1982's activity by $60 million or more, he says, with total 1983 volume possibly poss-ibly setting a new dollar amount record. "The net effect on employment will be to regain about one-half of the jobs lost in this industry during the past three years," Dr. Robson notes. LOOKING AT primary metals, he says the "general view that employment losses in copper and steel are likely to be permanent, perma-nent, even after the recovery has run its full course, needs to be carefully examined." Noting the state's steel industry is operating operat-ing at about 40 percent of capacity, he adds that "productivity was already very high in steel operations and changes in output do require additional employees. The demand for steel will not improve much until the national recovery is well under way." BUT COPPER is different, Dr. Robson emphasizes, indicating its close tie to construction, con-struction, automobile and capital goods industries in-dustries nationally. Noting the influence on domestic production by various foreign operations being maintained at what could V be termed artificially high levels, he looks to permanent loss of about one-fourth of the jobs formerly available while copper prices can be expected to rise as national recovery begins. Some price forecasts put that at up from 70 to 85 cents per pound by the third quarter of 1983. "This should remove the fears of a copper industry shutdown for an extended period," he says. IN VIEWING the manufacturing sector, that he calls "highly diversified," Dr. Robson Rob-son says it will improve "only slightly" in 1983, while electronic and computer activity activ-ity should improve "modestly" and defense activity will continue to grow "significantly." "signifi-cantly." "High technology" is being looked to for "significant" gains, he continues, while food and related products should "hold their own" and textile apparel, chemical and petroleum products will continue at currently depressed levels through 1983. "SUCH Industries as copper and steel will be relatively less important in the future," fu-ture," he says, adding that "it would also appear the expectations of two years ago regarding energy resources development will be scaled down and delayed, probably by seven to 10 years" in the state. "No one should overlook, however, the importance of the region's natural resources. re-sources. They will continue to be an important impor-tant part of Utah's economic base. "WHILE LONG-TERM growth in the region re-gion and each state is ultimately dependent upon conditions in national and international internation-al markets," Dr. Robson continues, "the factors that have caused this region to outperform out-perform the national economy over the past 10-12 years still seem to be present." He adds that the state's economic fortune last year was due largely to the move by American Express and Western Airlines hubs operations, adding 2,000jobs, with defense-related growth providing an additional addition-al 2,000. Hotel and motel employment saw a 1,200 increase. "THE NET loss of 3,000 jobs in Utah's total employment between December, 1981 and December 1982 would have been much greater were it not for the fact these new firms and expanded activities helped to cushion the recession's impact." He emphasized economic and industrial development programs have paid off for the state, and says they shouldn't be deterred during good years. "A long term commitment commit-ment to economic growth and development is required at all phases of the business cycle, cy-cle, if Utah is to provide jobs for the natural increase in its labor force." |