Utah’s latest employment picture continues to show a mixed bag of results with construction employment down 10 percent over the last year while job growth continues to be strong in the education, healthcare, and natural resources industry sectors. The state’s overall employment growth rate in June continued the most recent downward trend with a rate of 0.9 percent.

In both job growth and unemployment rate, Utah still continues to fare better than the nation as a whole. Utah’s unemployment rate in June held at 3.2 percent as did the nation’s rate of 5.5 percent. Job growth nationally has declined over the past year by a fraction of a percent.

However, the immediate future is problematic. Characterizing the construction industry as a “heavy albatross,” Mark Knold, senior state economist, says, “considering the negative dynamics currently surrounding the housing market and the mortgage lending activities, it is anticipated that this market will not stabilize until 2009 at the earliest.”

Those sectors experiencing job growth are benefiting from the steadily growing population in Utah, Knold explains, adding that education, for example, typically becomes an alternate to fewer job opportunities.

In addition to the downturn in construction, the financial services sector showed a 0.4 percent decline over the past year. However, while other sectors in the state continue to move in the positive territory, the trend for growth has slowed significantly. “Whereas the trade, transportation, and utilities sector showed over-the-year growth of 6,500 jobs in January, now that year-over growth in June has slowed to just 4,600 new jobs,” Knold says. “The professional and business services sector was growing by 4,500 year-over jobs in January but is now down to 3,300. The trend is toward slowing, and, in some cases, that slowing will move several industries onto the negative side of the ledger.”

Unfortunately, the decline in construction job numbers is expected to continue, Knold explains. Utah’s housing boom was not only fueled by temptingly low mortgage rates but also by Utah’s expanding population base. Employment in Utah’s construction industry ballooned by nearly 52 percent to 103,500 jobs between 2002 and 2007. And, with the fact that new home permits in Utah are expected to top out at just 13,000 in 2008, Knold paints a potentially grim picture:

“If it took around 26,000 new homes for several years and much nonresidential construction activity to support the addition of 35,000 more construction workers in the Utah economy, how many workers have to be taken out of the equation to support the building of only 13,000 new homes? Up to this point, nearly 11,000 workers have been removed, but the probable continued lack of housing activity suggests that another 11,000 may yet be shed over the next year.”

Although the population demographics favor growth, economic factors clearly trump any notions of expansion. As housing prices retreat to match the newly reinvigorated requirements and costs for lending and as higher energy costs and inflation reshape the economic markets, any reasonable expectations of a resurgent housing market would not be possible until at least 2010 at the earliest.