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Monday Report
Utah Economic Snapshot February 19th 2008


ECONOMIC NOTES:

THIS WEEKS LEADS

Don't Miss the Bald Eagles


 

SCORECARD
SCORECARD

Utah Economic Snapshot - First Seven Months

Utah Labor Market Indicators - Jan 2008 (Dec 07)

  • Employment Growth: 2.8% (3.2%)
  • Employment Increase: 33,800 (44,800)
  • Unemployment Rate: 3.3% (3.2%)

Source: Utah Dept of Workforce Services, 1/15/08


U.S. Labor Market Indicators - Jan 2008 (Dec 07)

  • Employment Growth: 0.7% (0.9%)
  • Unemployment Rate: 4.9% (5.0%)

Source: Utah Dept of Workforce Services, 2/15/08


________________________________________

Where Are the New Jobs? - Dec 2007

  • State Total (Market Share) 34,232 +2.8%
  • Salt Lake County (48.1%) 16,475 +2.8%
  • Utah County (17.2%) 5,891 +3.2%
  • Weber County (6.9%) 2,376 +2.5%
  • Washington County (4.5%) +1,531 +3.0%
  • Davis County (4.4%) 1,501 +1.5
  • Cache County (3.8%) 1,303 +2.7%
  • Summit County (3.6%) 1,232 +5.0%
  • Box Elder County (2.9%) 981 +5.0%
  • Tooele County (2.0%) 680 +4.5%
  • Duchesne County (1.5%) 524 +7.5%
  • Wasatch County (1.3%) 439 +6.6%
  • Sanpete County (1.0%) 327 +4.4%

Source: Utah Dept of Workforce Services, 2/15/08


Where are we losing new jobs? - Jan 2008

  • Iron County -140 -0.8%
  • Emery County -85 -2.2%
  • Rich County -22 -3.7%

Source: Utah Dept of Workforce Services, 2/15/08


What are our new Jobs? - Jan 2008

  • Health Services and Social Assistance 5,100 +4.9%
  • Accommodation and Food Services 3,200 +3.5%
  • Food Services and Drinking Places 2,800 +3.9%
  • Professional, Scientific, and Technical Services 2,700 +4.4%
  • Ambulatory Health Care Services 2,500 +5.8%
  • Heavy and Civil Engineering 2,000 +21.9%
  • Specialty Trade Contractors 1,900 +2.9%
  • Other Local Government 1,500 +3.4%
  • Computer & electronic Products 1,200 +9.6%
  • Architectural, Engineering & Related 1,200 +9.5%

Source: Utah Dept of Workforce Services, 1/15/08


What jobs are we losing? - Jan 2008

  • Business Support Services (900) -4.9%
  • Telecommunications (-900) -11.7%
  • Transportation and Equipment Manufacturing (- 300) -2.4%

Source: Utah Dept of Workforce Services, 2/15/08


Economic Snapshot - First Seven Months (6 mos) (5 mos) FY2008

Utah State Government

  • Sales and Use Taxes (Gen Gov't) -2.8% (-2.2%) (+1.9%)
  • Individual Income Taxes (Education) +9.1% (+7.7%) (+5.6%)
  • Individual Income Tax Withholding (Education) +8.9% (+8.6%) (+7.4%)
  • Corporate Franchise Taxes (Gen Gov't) -7.3% (-2.4%) (-6.7%)
  • Motor Fuel Taxes (Transportation) +10.8% (+1.9%) (+1.6%)
  • Severance Taxes (Gen Gov't) -10.0% (-6.1%) (-2.4%)
  • Wine and Liquor Taxes (Education) +9.2% (-11.0%) (+11.5%)

Source: Utah State Tax Commission, TC-23 2/15/07


Economic Snapshot - First Seven Months (6 mos) (5 mos) FY2008

Local Government

  • Transient Room Tax +19.5% (+19.1%) (+41.3%)
  • Tourism, Recreation, Cultural, Convention +10.6% (+10.6%) (+9.9%)
  • Emergency Services Phone Charge +8.7% (+9.9%) (+12.3%)
  • Public Transit +31.6% (+37.8%) (+40.2%)

Source: Utah State Tax Commission, TC-23 2/15/07


Long-term trends in the global capital markets

  • Several current trends will continue to influence the world's financial markets long after the present bout of turbulence ends.
  • Struggling credit markets, slumping stocks, and a sliding dollar have been generating anxiety among executives and policy makers in early 2008. Amid the turmoil, it's easy to forget that long-term structural change in the world's capital markets will probably prove more important than short-term fluctuations, as it did after the 1987 US stock market crash, the 1992 assault on the British pound, and the 1997 unraveling of Asia's financial markets.
  • Recent McKinsey Global Institute (MGI) research highlights several trends that look set to continue during the years ahead, long after the present bout of market turbulence has ended:
    • the continued growth and deepening of global capital markets as investors pour more money into equities, debt securities, bank deposits, and other assets around the world
    • the soaring growth of financial markets in emerging economies and the growing ties between financial markets in developed and developing countries
    • the shift of financial weight in Asia from Japan toward China and other fast-growing emerging markets
    • the growing financial clout of the eurozone countries and the significance of the euro
    • the burgeoning role of oil-rich Middle Eastern countries as suppliers of capital to the world, along with the rise of new financial hubs in the Middle East to complement the rapidly growing hubs in London and Asia
  • While these trends reflect a shift in financial power from the United States toward other parts of the world, the sheer size and depth of the US market will give it a leading role on the international financial stage for years to come.

Source: McKinsey & Co. 2008


2008 Retail Report

  • The Salt Lake City retail market will exhibit strength throughout 2008 as steady job growth and residential expansion drive retailer demand.
  • Although the housing market is weighing on consumer confidence throughout much of the country, the single-family market in Salt Lake City remains healthy, and prices continue to push higher. In addition, metrowide job growth will again outpace the national average, led by the higher-paying professional and business services sector. The city's CBD is currently undergoing a substantial transformation, highlighted by the $1.5 billion redeČvelopment of the mixed-use City Creek Center, which has generated business.
  • Buyers will remain active in Salt Lake City this year, motivated by a strong local economic outlook, as well as cap rates that are relatively high compared to other Western markets. Currently, cap rates are averaging in the low- to mid-7 percent range, although the healthy amount of completions could place downward pressure on average rates as newer properties exchange at premium valuations. Downtown redevelopment efforts are providing investors with long-term prospects for area retail, while rising tenant demand in response to residential growth is causing prices to increase. The investment outlook remains bright for properties located in the Southwest submarket, with continued residential growth in West Jordan supporting investor demand for area retail, resulting in above-average price appreciation.

    2008 Market Outlook

  • 2008 NRI Rank: 26, Up 8 Places. Salt Lake City climbed eight places in this year's NRI, fueled by robust employment growth.
  • Employment Forecast: Employers within the Salt Lake City market are expected to add 20,000 positions in 2008, an increase of 3.1 percent. Last year, employers created 24,000 new jobs.
  • Construction Forecast: Developers are forecast to deliver 1.1 million square feet of new retail space by year end. In 2007, 2.1 million square feet came online in the metro. Nearly 45 percent of this year's additions will be concentrated in the Upper Counties submarket.
  • Vacancy Forecast: After shedding 20 basis points last year, vacancy is expected to decline 10 basis points to 7.7 percent in 2008. Salt Lake City's healthy economy should support continued retail sales growth, albeit at a more modest pace than in recent years, fueling steady absorption.
  • Rent Forecast: Rising tenant demand, modest occupancy improvements and healthy retail sales will allow for rent growth. Asking rents are expected to advance 1.7 percent to $16.60 per square foot, while effective rents will push up 1.2 percent to $14.82 per square foot by year end.
  • Investment Forecast: Investors may want to look to the Sandy/Midvale submarket, where healthy tenant demand and a lack of significant new construction are expected to drive robust revenue growth in 2008.

Source: Marcus & Millichap, 2008 Retail Report

Greetings!

Utah Economic Snapshot

  • First seven months.
  • How are we doing with Jobs?
  • Where are the new jobs?
  • What is hapening with Retail Sales?
  • What will be the impact on municipal budgets?
  • What will the Utah Ligislature have to spend?

Bob Springmeyer

Bonneville Research


  • ECONOMIC NOTES:
    • International Business Confidence
    • Businesses remain very nervous, expressing substantial concern regarding their present situation and prospects six months hence. Confidence is at a level consistent with a contracting economy in the U.S., marginal growth in Canada and Europe, and at the low end of potential growth in Asia and South America. Hiring intentions have fallen sharply since late January, and equipment investment has also notably weakened. Real estate firms and financial institutions are the most worried, but business service firms and even manufacturers and high-tech firms are measurably more nervous. Pricing pressures remain subdued despite currently high oil prices.
    • International Trade (FT900)
    • The nominal U.S. trade deficit in goods and services narrowed by 6.9% in December. The U.S. trade deficit came in at $58.76 billion, $4.36 billion less than November's $63.12 billion, according to the Bureau of Economic Analysis. In November, exports increased and imports decreased. The goods deficit with China narrowed to $18.8 billion, 0.6% less than December a year ago. Crude oil prices increased in December, which in turn increased the nation's total import bill for energy-related petroleum products to $32.9 billion.
    • ABC News/Washington Post Consumer Comfort Index
    • Consumer confidence continues to slide as housing evaporates, labor markets weaken, and energy prices remain elevated. According to the ABC News/Washington Post consumer comfort index, sentiment declined four points to -37 in the week ending February 10. Sentiment has been on a downward trajectory since September but the deterioration has accelerated over the past month. Sentiment has declined 17 points since January, making this its second largest decline on record, surpassed only by the 1990-1991 recession.
    • Treasury Budget
    • The unified surplus for January was $18 billion, above the CBO's preliminary estimate of a $15 billion surplus. The federal government has run a deficit of $88 billion through the first four months of fiscal year 2008; this is more than double the deficit at the same point in fiscal year 2007. After a few years of improvement, the federal budget deficit is again widening.
    • NAR Metro Prices
    • Housing markets are collapsing across the nation, according to the National Association of Realtors' report on fourth quarter 2007 regional activity. Home sales continue to descend, with only one state posting a y/y increase. Metro area house prices are rapidly falling: More than half of the reported MSAs are sustaining a y/y decline in median prices. The greatest price declines are in Florida, California and the Midwest.
    • Retail Sales (MARTS)
    • Total retail sales unexpectedly rose 0.3% in January, following an unrevised 0.4% decline in December. Stunningly, sales at auto dealers increased despite the huge decline in unit auto sales. Hence, non-auto sales rose the same 0.3% after falling 0.3% in December (originally reported as a 0.4% decline).
    • Business Inventories (MTIS)
    • On the back of weak sales, total business inventories increased by 0.6% in December. Retail inventories are the new piece of data in this morning's report, and these fell by 0.1%. Sales fell across all categories and, on aggregate, declined by 0.5%. The I/S ratio crept up slightly in response, now up to 1.26 from 1.25 previously.
    • MBA Mortgage Applications Survey
    • The MBA market composites finished down for the week. The market index ended the week of February 8 at 1,063.5, down 2.1% from the previous week. The purchase index finished at 403.9, down slightly by 0.3% from the last week. The refinance index finished at 4,901.5, down 3% from the last week. Although the indications are that refinancing activity is starting to ebb, this is still a substantial amount. The purchase indicator is still stuck at a substantially lower level than the 2007 average.
    • Chain Store Sales
    • Chain store sales fell in the week ending February 9, continuing the recent inconsistent pattern of growth according to the International Council of Shopping Centers. Sales declined 0.7%, but year-over-year growth inched up 1.8%. Warmer-than-normal weather in large parts of the country provided little lift to sales.
    • Jobless Claims
    • Initial jobless claims fell by 9,000 to 348,000. Most of the new year volatility is now in the past, and as evident by this latest claims figure, layoffs remain elevated compared with their trend through much of 2007.
    • Oil and Gas Inventories
    • Crude oil inventories rose by 1.1 million barrels for the week ending February 8 according to the Energy Information Administration, short of expectations of a 2.4 million barrel build. Distillate supplies fell by 0.1 million barrels, above expectations of a 1.4 million barrel decline. Gasoline inventories rose by 1.7 million barrels, slightly ahead of expectations of a 1.5 million barrel build. Refinery operating capacity rose to 85.1% from 84.3%. This report will have little impact on oil prices.
    • Weekly Natural Gas Storage Report
    • Underground storage of natural gas declined by 120 billion cubic feet during the week ending February 8, nearly identical to the consensus forecast, which called for a decline of 119 billion cubic feet. Inventories currently stand 8.6% below their year-ago level.

    Source: Economy.com 2008


  • THIS WEEKS LEADS
    • Tilly's
    • Tilly's operates 73 locations throughout AZ, CA, CO, FL and NV.
    • The stores, offering apparel, shoes and accessories, occupy spaces of 6,000 sq.ft. to 10,000 sq.ft. in malls and lifestyle, outlet, power and strip centers.
    • Plans call for 30 openings throughout AZ, CA, CO, DE, FL, MD, NJ, NV, PA and VA during the coming 18 months.
    • Typical leases run 10 years with options.
    • Preferred cotenants include Target, Old Navy, department stores, sporting goods stores and movie theaters.
    • Preferred demographics include a population of 300,000 within 10 miles earning $70,000 as the average household income.
    • For more information, contact
      • John Burgess,
      • Tilly's,
      • 10 Whatney,
      • Irvine, CA 92618; W
      • eb site: www.tillys.com.
    • Franktitude
    • Franktitude operates six locations throughout FL.
    • The restaurants, serving hot dogs, occupy spaces of 1,000 sq.ft. to 2,000 sq.ft. in entertainment and power centers as well as airports, colleges, downtown/urban and freestanding areas and hotels.
    • Plans call for 50 openings nationwide during the coming 18 months, with representation by Ape Realty, Inc.
    • For more information, contact
      • Mark Camara,
      • Ape Realty, Inc.,
      • 4491 West Whitewater Avenue,
      • Weston, FL 33332;
      • Web site: www.aperealty.com.
    • Quiznos
    • Quiznos operates 5,000 locations nationwide and internationally.
    • The restaurants occupy spaces of 1,300 sq.ft. in power centers and streetfront locations.
    • Growth opportunities are sought throughout southern CA during the coming 18 months, with representation by Epsteen & Associates.
    • Typical leases run 10 years.
    • For more information, contact
      • Steve Ganalon,
      • Eptsteen & Associates,
      • 1429 4th Street,
      • Santa Monica, CA 90401;
      • Web site: www.epsteen.com.

  • Don't Miss the Bald Eagles
  • Bald Eagles at Farmington Bay

    • Farmington Bay WMA
    • 1700 West Glover Lane (925 South)
    • Farmington, UT

    Directions to: The Great Salt Lake Nature Center at Farmington Bay WMA Coming From Salt Lake or from South of Farmington

    • To reach the WMA, travel north on I-15, and exit the freeway at Exit 324.
    • Turn left on Park Lane and travel west.
    • The road will angle to the south, and you'll come to Clark Lane at the first traffic light.
    • Turn right. Travel west to the first stop sign, which is at 1525 West, and turn left.
    • Travel south to Glover Lane, and turn right.
    • Travel west on Glover Lane for about two blocks until you come to 1700 W.
    • Turn left on 1700 W. and travel south to the Great Salt Lake Nature Center.
    • You can park in the parking lot.
    • Estimated drive time from downtown Salt Lake City: 30 minutes

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      • BobSpring@BonnevilleResearch.com
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      • 801-746-5706
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