Monday Report
Utah Employment by County January 2007 - 2009 March 9th, 2009




Car Dealership Closures Accelerate


  • Global Business Confidence -26%
  • A pall continues to hang over global business confidence as it has since sentiment collapsed last fall. Confidence remains near a record low. Views regarding sales, hiring and investment all remain extraordinarily poor. Indeed, there are very few positive responses to any of the questions across all of the respondents. Most worrisome is the recent collapse in pricing power; a record over one-third of respondents now say they are cutting prices for their goods and services. Confidence is uniformly weak across all industries and regions of the globe.
  • GDP -6.2%
  • There was a major downward revision to GDP for the fourth quarter of 2008. Real GDP fell 6.2% at an annualized rate in the fourth quarter, according to Friday's release; in the advance release in January, the reported decline had been 3.8%. This is the biggest contraction in real GDP since the first quarter of 1982. The downward revision was much larger than expected. Most components contributed to the downward revision, especially lower investment in inventories, lower exports, and weaker consumer spending on nondurable goods. The enormous contraction in the fourth quarter is a further sign of how serious the problems in the U.S. economy are.
  • Personal Income +0.4%
  • Personal income unexpectedly rose 0.4% in January, a number distorted by several special factors, after falling 0.2% in December. Wage income fell for the third consecutive month, driven by large job losses. Spending rose 0.6%, reversing only part of December's 1% decline, although this is not a sign of a resurgence of spending. Real spending rose 0.4%. The core PCE deflator rose 0.1% after being unchanged for three straight months. The top-line deflator rose 0.2% after declining for three straight months. The saving rate rose to 5% as inflation adjustments reduced taxes. The rate was revised upward for prior months, along with wage income from the inclusion of third quarter QCEW data in the report.
  • Semiconductor Billings -11.9%
  • Global semiconductor sales slumped to $15.3 billion in January from $17.4 billion in the prior month on a three-month moving average basis. A deepening global recession and very tight credit conditions continue to weaken demand in consumer, manufacturing and automotive sectors for semiconductors.
  • Agricultural Prices -8.6%
  • The preliminary All Farm Products Index of Prices Received by Farmers declined 8.6% in February. The crop index is down 7.5% and the livestock index decreased 4.4%. The index of prices paid for means of production is down 1.1%.
  • Bankruptcy Filings +32%
  • With the recession intensifying, both business and personal bankruptcy filings grew rapidly in the fourth quarter. The number of personal filings remains low, however, still impacted by reforms enacted in late 2005. Filings were 32% above last year but remained more than 20% below the fourth quarter of 2004, before reform legislation and in a better credit environment. Business bankruptcies are high by any measure, with filings up 62% from last year to the highest level since 1997
  • Productivity and Costs
  • There was a significant downward revision to productivity in the fourth quarter and upward revisions to unit labor costs in both the third and fourth quarters. Stronger unit labor costs can be traced to a faster pace of economic contraction and higher labor compensation to a lesser extent. The report is bad news with respect to corporate profits.
  • Factory Orders (M3) -1.9%
  • Factory orders fell 1.9% in January, the sixth consecutive monthly decline. The decline was smaller than expected due to an increase in nondurable goods orders, which was the result of smaller nominal price declines over the month for petroleum products. Durable goods orders, which were first published last week, received an upward revision, cutting January's decline to 4.5%. Shipments fell for the sixth consecutive month, also the longest streak of declines since the series was first published.
  • Employment Situation - 651K
  • February was a disastrous month for the nation's labor market. Payroll employment declined by 651,000 while losses increased to 655,000 in January and 681,000 in December. Thus, payroll employment declined by nearly 2 million jobs in just three months. Such a plunge was last seen in the mid-1940s when wartime production was winding down. The unemployment rate increased by 0.5 percentage point, to 8.1%.
  • Monster Employment Index -26%
  • Online recruitment ads placed by U.S. employers during February rose modestly from a month ago. The Monster Employment Index rose 4 points between January and February, ending four straight months of declines. Of the 20 industries tracked by the index, all but three reported month-ago increases in job availability. The index, however, was down 26% on a year-ago basis, identical to the annual rate of decline recorded in January, which suggests that the labor market endured yet another month of steep job losses.
  • Mass Layoffs + 158%
  • Employers announced job cuts that will hit 186,350 workers in February. This is down from the January total of 241,749 but is still indicative of a sharply contracting labor market. Last month's figure was 158% higher than the total for February 2008. The auto industry led all others, by far, in the number of announced cuts, followed by industrial goods, retail, financial services and electronics.
  • Jobless Claims -31K
  • Initial claims for jobless benefits decreased 31,000 to 639,000 for the week ending February 28, exceeding expectations for a milder decline. Continuing claims decreased as well, dropping 14,000 to 5.106 million for the week ending February 21. Although both indicators dropped in the week, they still remain very high and appear to be generally heading higher. Layoffs are rising, and it is difficult for the unemployed to find new work.
  • Construction Spending (C30) -3.3 %
  • Construction spending for January fell by 3.3% from the revised December total and is now down by 9.1% from January 2008. Private construction spending for January fell by 3.7% compared with December, led by a 4.3% decline in nonresidential construction spending, though residential construction spending also fell by 2.9% from December to January. Public construction spending fell 2.3% from December to January. As expected, construction spending for January continued to deteriorate because of the economy's worsening conditions, but the spending decline was worse than forecast.
  • Pending Home Sales - 7.7%
  • Contracts signed for sales of existing homes plummeted from December to January, indicating that sales of existing homes are likely to decline in the first quarter. The pending home sales index fell 7.7% in January to 80.4, a much larger decline than had been expected. Further, the index value for December was revised downward slightly. On a year-ago basis, the national index is down 6.4%.
  • MBA Mortgage Applications Survey -12.6%
  • In the week ending February 27, the MBA market index fell 12.6% to 649.7. Both parts of the composite also declined. The purchase index fell 5.6% to 236.4, while the refinance index fell 15.3% to 3,063.4. These are relatively large swings considering contract rates held steady; the 30-year fixed rate increased 7 basis points, while the one-year adjustable rate fell 1 basis point.
  • MBA Delinquency Rates +89bp
  • Mortgage delinquency rates set a new all-time record in the fourth quarter, surging 89 basis points to 7.88%. The performance of mortgage loans has deteriorated significantly as house prices plummeted and the unemployment rate soared. There was a slight increase in the rate of new foreclosures. On a not seasonally adjusted basis, 1.08% of mortgages entered foreclosure, up 1 basis point from the prior quarter. Foreclosure moratoriums prevented the number of foreclosures from being higher.
  • Consumer Credit (G19) +$1.8b
  • After declining over the past three months, consumer credit balances increased unexpectedly in January. Total credit expanded by $1.8 billion to a total of $2.564 trillion. Revolving and nonrevolving lines of credit contributed equally to this increase.
  • Vehicle Sales -40%
  • The weak economy combined with constrained access to credit pushed vehicle sales down another notch in February. Vehicle sales fell to a seasonally adjusted annualized rate of 9.1 million units. This was down from 9.5 million units in January and more than 40% below the year-ago pace. Domestic and international manufacturers alike are selling significantly fewer vehicles, and sales are falling to both consumers and fleets.
  • Chain Store Sales -0.1%
  • Chain store sales improved in February with the majority of retailers reporting better than expected same-store sales. In aggregate, sales fell 0.1% for the month, according to the ICSC, the fifth consecutive decline, but better than January's 1.6% decline and expectations. Excluding Wal-Mart, sales fell 4.3%, an improvement from January's 4.6% drop but less so. Gasoline prices again were a significant drag on sales for the month, undermining sales at warehouse clubs. Luxury sales continued to tumble as consumers remain intensely focused on necessities as the overall spending picture remains weak.
  • Oil and Gas Inventories -700kb
  • Crude oil inventories unexpectedly fell by 700,000 barrels during the week ending February 27, according to the Energy Information Administration, below expectations of a 1 million barrel buildup. Gasoline inventories rose by 200,000 barrels. Distillate inventories rose by 1.7 million barrels. Refinery operating capacity rose to 83.1% from 81.4%. Total domestic petroleum demand rose. This is a bullish report.
  • Weekly Natural Gas Storage Report - 102bvf
  • Working gas in underground storage decreased by 102 billion cubic feet during the week ending February 27. The consensus estimate was for a decline of 100 billion cubic feet.


  • Utah Employment
    • Where the jobs are?
    • How do you rank?
    • Who is doing better?
    • Who is being hit the hardest?
  • Public Policy Initiatives
  • Car Dealership Closures Accelerate
  • Economic Notes
  • Grants
  • This Weeks Leads

  • About 20,400 more Utahns were out of work in January compared to the same month last year, with the historically high number of claims for unemployment benefits labeled "stunning." The state's unemployment rate also climbed to 4.6 percent in January, up from an adjusted December rate of 4.1 percent, the Utah Department of Workforce Services said. In January of 2008, the jobless rate for the state was 3.2 percent.

    Utah Employment - County January 2007 - 2009

    Ranked by % Change

    CountyJan 2007 Jan 2008Jan 2009 # Change 08-09% Change 08- 09
    Duchesne6,989 7,8288,760932 11.9%
    Uintah13,647 14,14315,5141,371 9.7%
    Carbon8,947 9,36510,046681 7.3%
    Garfield1,803 1,8581,985127 6.8%
    Summit24,407 26,44727,155708 2.7%
    Beaver1,931 1,9772,00730 1.5%
    Kane2,756 2,7032,73734 1.3%
    Wayne914 94595611 1.2%
    Grand3,653 3,7423,77331 0.8%
    Rich602623 62630.5%
    Sanpete7,366 7,6447,635-9 -0.1%
    Sevier7,723 7,9757,927 -48-0.6%
    San Juan3,8963,941 3,910-31-0.8%
    Piute313334 331-3-0.9%
    Tooele15,064 15,17415,034 -140-0.9%
    Millard3,908 3,8753,823 -52-1.3%
    Weber93,588 95,48594,092 -1,393-1.5%
    State Total1,219,2881,244,564 1,224,120-20,444-1.6%
    Davis100,378 101,05999,346 -1,713-1.7%
    Utah182,042 184,695181,405 -3,290-1.8%
    Cache48,797 51,15750,200 -957-1.9%
    Salt Lake586,290598,499 586,087-12,412 -2.1%
    Box Elder19,49220,284 19,812-472 -2.3%
    Iron17,013 16,92816,462 -466-2.8%
    Washington51,334 52,00449,845 -2,159-4.2%
    Juab3,728 3,2043,062 -142-4.4%
    Emery3,838 3,8643,640 -224-5.8%
    Morgan1,865 1,8611,715 -146-7.8%
    Wasatch6,672 6,5535,898 -655-10.0%
    Daggett332 397336-61 -15.4%

  • Source: Utah Department of Workforce Services, March 2009

    Utah Labor Market Indicators - January 2009 (December, November, October) 2008

    • Employment Growth: -1.6% (-1.9%, -0.9%, - 0.2%)
    • Employment Peaked September 2008: 1,261,050
    • Unemployment Rate:
      • January 4.6%
      • December 4.3%
      • November 3.7%
      • October 3.5%
      • September 3.5%
      • August 3.7%
      • July 3.5%
      • June 3.3%
      • May 3.2%
      • April 3.1%
      • March 3.3%
      • February 3.0%
      • January 2008 3.0%
      • December 2007 2.9%
      • November2007 2.8%

      Source: Utah Dept of Workforce Services, 3/1/09

    • NH - Lynch Announces New Online Resource to Help Citizens Facing Mortgage Problems. Gov. John Lynch announced a new online resource aimed at helping consumers address potential mortgage problems. "With the national recession and ongoing mortgage crisis, many New Hampshire families are seeing their dreams of home ownership put at risk. In these difficult economic times, many New Hampshire families are struggling to keep their homes and are looking for help. This new website will help connect families with the resources they need," Gov. Lynch said.
    • Midwest Governors Move on Plan to Reduce Carbon Emissions. Wisconsin is among a group of Midwestern states poised to unveil a regional plan to limit carbon dioxide emissions that many scientists say contribute to global warming, Gov. Jim Doyle said. Doyle said an announcement could come this fall, but a lot depends on what happens with efforts in Congress to establish a national energy plan that calls for reducing greenhouse gases and spurring the development of clean energy. The regional accord, which includes Illinois, Iowa, Kansas, Michigan, Minnesota, Wisconsin and Manitoba Province in Canada, calls for a cap-and-trade system to curb carbon dioxide emissions by 15 to 25 percent by 2020 and 60 to 80 percent by 2050. Doyle said Midwestern governors prefer a national cap-and-trade strategy, but they believe their states should take the initiative and they are doing could help inform lawmakers as they write energy legislation. http://www.htrnews.com903040472/1984/MAN04
    • MD - O'Malley Calls For 'Rational Regulation.' Gov. Martin O'Malley proposed to give the state government the power to order construction of new energy plants, reversing a decade of deregulation of electric utilities. "Deregulation has failed us," O'Malley said. "Rather than relying on market forces that have failed to deliver for us, we'll put those important decisions about securing our energy future into the hands of the Public Service Commission." Under the plan, power companies would only be allowed to recoup their costs when building a plant, plus a reasonable rate of return, rather than charge consumers what the market would bear. 40575037.html
    • NJ - Corzine Launches Green Jobs Program. Gov. Jon S. Corzine helped launch a training program that will create hundreds of so-called green- collar jobs for high school graduates. The governor unveiled the $2 million training program at Isles, a community development organization in the city that has created a Center for Energy and Environmental Training, which expects to train several hundred people this year, and roll out its training program throughout the state. It's expected that thousands of jobs, which will involve completing energy audits and retrofitting buildings to save energy, among others, will be created in the state during the next few years, as part of Corzine's goal to reduce greenhouse gas emissions by 20 percent by 2020. http://www.njbiz.com31335302.016&aID2=77431
    • OH - Strickland Supports Solar Panels at Guard Sites. The federal stimulus package will help to fund installation of solar panels at three Ohio National Guard facilities, including in Toledo. In Ohio, 22 facilities will be funded with the focus chiefly on roofing and energy efficiency projects. "Not only will we extend the lives of the facilities, but we will reduce our operating expenses and be more environmentally friendly," Gov. Ted Strickland said. http://toledoblade.03903030385/-1/NEWS24

    • Tuesday Morning
    • Tuesday Morning, Inc. trades as Tuesday Morning at 854 locations nationwide.
    • The stores, offering rugs, lamps, books, luggage, china, toys, bed and bath accessories, holiday decorations and accessories, garden accessories, stationery, women's accessories, dinnerware and fine art and frames, occupy spaces of 8,000 sq.ft. in entertainment, lifestyle, power, strip, tourist and value centers, malls, freestanding locations and urban/downtown locations.
    • Growth opportunities are sought throughout the existing market during the coming 18 months.
    • Typical leases run five years with two, five-year options.
    • A vanilla shell is required.
    • Preferred demographics include a population of 100,000 within a five-mile radius.
    • For more information, contact
      • Melissa Dean,
      • Tuesday Morning, Inc.,
      • 6250 LBJ Freeway,
      • Dallas, TX 75240;
      • Web site:
    • Sleep Number By Select Comfort
    • Select Comfort Retail Corp. trades as Sleep Number By Select Comfort at 465 locations nationwide.
    • The stores, offering air controlled, adjustable-firmness mattresses, occupy spaces of 1,600 sq.ft. to 2,500 sq.ft. in entertainment, lifestyle and specialty centers, as well as malls.
    • Growth opportunities are sought throughout the existing market during the coming 18 months.
    • Typical leases run five years.
    • Preferred cotenants include Williams Sonoma, Pottery Barn, Eddie Bauer, Coach, Brookstone, Banana Republic, J. Crew, The Limited Too, The Cheesecake Factory and P.F. Chang's.
    • Preferred demographics include a population of 150,000 within a five-mile radius earning $50,000 as the average household income.
    • For more information, contact
      • John Key,
      • Select Comfort Retail Corp.,
      • 9800 59th Avenue North,
      • Minneapolis, MN 55442

  • Car Dealership Closures Accelerate
    • While General Motors and Chrysler Corp. remain on financial life support and demand for cars and trucks wanes, the number of shuttered dealerships is piling up. Since 2005, 1,795 dealerships have closed, says the National Automobile Dealers Association (NADA).
    • This year, the industry projects a net of 900 closings, dropping the total number of dealerships to 19,075. The closures provide an opportunity for retailers, office developers and hotel operators to buy prime sites rarely available for sale.
    • "Most of those properties are valuable and there will be rather strong interest in them," says Chuck Lanyard, president of the Goldstein Group, based in Fair Lawn, N.J. "As bad as things are, this economy is creating a lot of good opportunities for people as well."
    • For instance, a year ago Rutherford, N.J.-based developer Eden Property Co. and partner Landmark Realty bought a 1.7-acre site in New Jersey from Ford Motor Co. In June, the site will re-open as a 28,350 sq. ft. shopping center.
    • With car sales slumping by double digits on a year- over-year basis at each of Detroit's Big Three - General Motors, Ford and Chrysler - a new wave of dealership closures appears inevitable. Last year, vehicle sales in the U.S. declined by 18% to 13.2 million. In 2007, there were 16.1 million sales, according to NADA.
    • To maintain sales at the 2007 level, when each dealership sold an average of 750 cars, the industry would need to shutter at least 3,800 locations, reports Southfield, Mich.-based Grant Thornton. General Motors has announced closure of up to 2,146 dealerships by 2014. Ford and Chrysler are expected to follow suit.
    • The automotive real estate services group of Miami-based Colliers Abood Wood-Fay is working on 25 dealership dispositions and expects that figure to rise by 50% over the next few months, says Michael Fay, president. The team of Nelson Kramer, a vice president for CB Richard Ellis in Atlanta, has sold three dealerships in the past month and has listings for another eight.
    • How the dealership properties will be disposed of will vary. The assets can either be sold or leased, depending on the owner's preference.
    • Sites in "auto malls," which consolidate several dealer franchises, might be harder to sell, as their zoning use is often limited to auto sales by municipalities dependent on sales tax revenues, says Cheryl Bloodworth, a vice president with brokerage Grubb & Ellis in Newport Beach, Calif. Since few manufacturers are expanding, they could be vacant a while.
    • Stand-alone dealerships, which often boast locations on heavily trafficked thoroughfares with good frontage, easy vehicle access and flexible zoning, are highly desirable for retailers, says Scott Schafer, a managing director with Cushman & Wakefield in Buffalo, N.Y. Medical office buildings, hotels and storage facilities might also find the properties attractive.
    • Older dealership sites that contain car service facilities may suffer from environmental problems related to fuel spillage, which can take hundreds of thousands of dollars to clean up, Fay notes. However, many dealers carry environmental insurance and offer to pay for remediation.
    • With real estate investment at a standstill, dealership sites have been slow to move, says Schafer. In the fourth quarter of 2008, there were 73 land sales nationwide, a 72% decrease from the fourth quarter of 2007.
    • Dealerships boast some major advantages and many will eventually sell, says Kramer. "Historically, they've sold at a premium over other [property] types."

    Source: NREI, March 2009


    Bonneville Research is a regional consulting firm focused on consulting services to state and local governments and private companies seeking winning strategies and achieving impressive results.

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    Helping West Valley City

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    • To recognize that in the current economic climate that total amount of retail space (including Auto Dealerships) likely will be reduced.
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