The Fall and Rise of Utah’s Construction Industry
What happened to construction workers?
By Lecia Parks Langston, Senior Economist
"It is not the strongest or the most intelligent who will survive but those who can best manage change.”–Charles Darwin
The pre-Great-Recession economic boom was built on the back on the construction industry. In Utah and across the nation, a speculative housing-price bubble resulted in a huge demand for construction workers. However, once that bubble popped, many construction personnel were left without employment. What happened to that workforce? And once expansion returned, where did the building industry find a replenishing supply of employees? While a notable number of construction workers experienced a spell of persistent nonemployment during the recession, many found jobs in the construction industry as well as other industries. Still others moved to nearby states for employment while a smaller number moved even farther afield. When the industry began expanding again it drew workers from the same industries that had hired separated construction employees during the recession. In turn, states which had attracted separated construction workers were typically those which fed Utah construction hires on the upswing.
Information is the treasure of the current age. The instant
access to information since the advent of the Internet has transformed
societies in ways that thousands of years prior had not. Information can lead
to knowledge, and — with increased knowledge — better efficiencies and way of
life. If information is vital, then the presentation of information has also
risen to a prominent level.With this, the Utah Department of Workforce Services has
made some organizational improvements to its economic webpages. Various
economic data categories are not mutually exclusive, but we made an effort to
compartmentalize economic data for a better organizational display and
navigation. We also added a new feature area that taps into various national data
elements and measurements from the Federal Reserve Economic Data (FRED), the
database of the Federal Reserve Bank of St. Louis. FRED’s added value is national
— and Utah — economic indicators. More on FRED’s contribution below. Depending on the subject, economic data can be categorized
as either broad or specific. For example, the demographic makeup of an area and
how that impacts an economic structure is a broad-subject approach. Conversely,
a current monthly snapshot of the Utah economy, its job growth and unemployment
rate is a more specific observation. Our economic webpage has four “portals”
through which to “categorize” and search for information. One portal is broad, while
the other three are more specific in nature.
The monthly employment profile just mentioned is a specific
topic and gets its own “portal,” entitled Employment Update. Here, the most
current Utah economic performance can be explored and summarized. The
information found here is what often gets cited in the local news media in
reference to the current Utah job performance and unemployment rate.
The second specific “portal” is labeled Local Insights. This
is a quarterly profile of the Utah economy down to a county level. Each county
is summarized with its own economic performance, including job growth,
unemployment rate, housing starts, taxable sales and other profile variables.
The common theme here is a county-specific approach.
The third specific “portal” is Reports and Analysis.
Workforce Services’ economic forte is the labor market. Things over and above
the everyday reporting on the labor market are presented here. Sometimes we do
special economic studies, other times we will report on specific economic
groups within the labor force, like women or veterans. Anything we do that is
not an often repeated or ongoing report are grouped here.
The final “portal,” and possibly the one that will be most
used, is labeled Economic Data. The core of our data collection and analysis is
concentrated here. Employment data, occupational data, wage information and
demographic profiles are just some of the major economic themes found in this
FRED's on site
As mentioned earlier, we have added an economic indicator
area tapping into FRED, which is a massive compilation of economic data from various
sources — primarily government statistical agencies, but also some nongovernmental
organizations. Workforce Services economists have gone through the list and
selected a handful of the most useful data series for gauging the performance
of Utah’s macro economy and gaining insights into expected trends. Utah
functions within the national economy, so the national economic indicators
profiled here are intended to also be guiding influences on the Utah economy. These
indicators include composite indexes; a recession probability indicator;
leading indicators, such as construction permits and the yield curve;
coincident indicators, such as real GDP and employment; and price indicators,
such as the consumer price index, regional housing prices, and oil and gas
prices. Each chart has a detailed description of what the data represent and
how they may be useful.
Keeping relevant with the fast-changing pace of the Internet
and data presentation is our goal at Workforce Services. We hope these changes
help to better present our broad package of economic data offerings.
This link will take you to an article by the Pew Charitable
Trust that includes the above map showing how much of each state’s land mass is
owned by the federal government. Because this federal land is untaxable, it
also shows how much money the federal government gives each state as payments
in lieu of taxes for the federally owned land. Hover on the map to find out each
state’s variables. It should not surprise one that Utah’s percentage is very
Shelter is one of humanity’s basic needs. That is why housing is everywhere. Since housing is so ubiquitous, it becomes an important component in an economy’s foundation, and as such becomes an economic indicator. In this issue of Local Insights, we look at the demand for housing structures, the amount of housing permits and their history, and how this history shows that housing demand follows the ups and downs of a region’s economic performance. In evaluating the volume of housing permits, we also parallel the health and vitality of the local economy. People need jobs that supply them income in order to afford housing. Jobs are not the only factor, as things like affordability and the ability to obtain lending also play their part in housing demand. But the foundation of housing demand is the health of the job market. The graph shows Utah statewide housing permits. A trend of normal permitting activity is evident from 1996 through 2004. Permits rose during the pre-Great Recession boom, then became lethargic for the seven years following. It is just recently that the volume of permit activity is again approaching something normal. That in itself is an economic indicator of an improved Utah economy.