Utah, Intermountain West most likely to rebound economically from pandemic
Geographically, the Intermountain West is between the West Coast and Great Plains. When it comes to economic recovery following COVID-19, the region is in an enviable position: the front.
The Intermountain West is the most likely region of the U.S. to rebound economically in the aftermath of the coronavirus, according to Moody’s Analytics. The main reason? It had a head start.
The Mountain West had “a number of real star performers” following the last economic expansion, according to Adam Kamins, director with Moody’s Analytics.
“Entering into this recession, where all parts of the country were hit hard, at least you were in the Mountain West, [where] you were coming in from a position of relative strength,” he said during a webinar presented by the Mountain West region of the Urban Land Institute (ULI), which includes Utah, Arizona, Colorado and Idaho.
“Our outlook for the Mountain West is very, very optimistic. It’s important to keep in mind the context here, too, that this includes the recession that we’re in the midst of now, so it’s not a given by any means that a state is expected to grow at all in the next five years.”
In fact, Moody’s predicts population declines in the Northeast and Upper Midwest, unlike the growing Mountain West. “The fact that these [Mountain West] states are positive at all is good,” Kamins said. “The fact that they are as high as they are really tells you just how bullish we are on the region as a whole.”
People moving to the Mountain West are motivated by lower costs and drawn to its “stellar” quality of life, he said. They’re also finding jobs, including those involving remote work. The share of the labor force that telecommuted in 2018 already was high, enabling the region to better withstand COVID-19-related disruptions associated with closures and lockdowns.
“Going forward, we would expect … remote work is going to become more and more important, that where your job is may not matter as much as it did before, and people are going to want to live somewhere where there are non-work reasons to locate in that place,” Kamins said.
Prospects for post-pandemic opportunity are strong in northern Utah because of population density — some people are wanting to avoid living in cities — and education levels. Among better-positioned metro areas are Salt Lake City and Provo.
State finances also are relatively positive in the Mountain West, he said. Reserve balances — the so-called “rainy day funds” — are in good shape, despite Utah and Idaho actually being below the U.S. average. “Population growth should be so strong, these two states can get by with somewhat lower reserves,” Kamins said.
Utah’s job mix also will help it in the post-COVID environment, he said. “Bottom line, the Mountain West is relatively strong in a number of office-using industries like tech, and then in Salt Lake City and Denver, finance as well,” he said. “These are industries that are white-collar industries that are withstanding this recession a lot better than some of their more blue-collar, low-wage types of peers.”
Theresa Foxley, president and CEO of the Economic Development Corporation of Utah, said Utah is essentially in the third phase of loosening economic restrictions prompted by the virus.
“We, as a state, like many of the other Intermountain West states, have had a fairly strong early initial response to the COVID-19 economic crisis that’s been thrown at us,” she said. “Fortunately, we do have what appears to be a fairly strong, albeit fragile, beginning of a recovery.”
Among the evidence is an unemployment rate that’s about half what it was in May.
“With some very careful balancing between economic restrictions and through standing up our health sharing and testing capabilities, the state is cautiously optimistic as we now head into the fall season,” Foxley said. “We’re thinking, of course, like many of you, about the return to school and cold and flu season, but we do have some early indicators that are helping us remain optimistic.”