Despite the booming economic growth led by businesses in the tourism and construction industries, the cost of living in Utah’s has risen from its 2017 levels. For 2019, it is ranked 25th with a grade of C+. If you’re one of the many construction companies in Salt Lake City focusing on commercial real estate, concrete road works, or other public infrastructure, what is the prospect like for your business?
The outlook remains positive as you look at critical areas of consideration.
Economic History and Infrastructure Ranking
Without going very far back in history, recent indicators suggest that Utah remains to be one of the thriving economies in the USA. Its growth rate in the past two years continues to be in the top five. It boasts of 1.5 million jobs, with a 2.8% job growth, which is slightly higher than the national average.
The top five largest corporations with products ranging from supplying automotive safety parts to airline services have a combined total of more than 202,000 employees. Also, for businesses that are into infrastructure, the state ranks 3rd overall, taking into account energy, Internet access, and transportation facilities.
The Construction Industry’s Outlook
Anirban Basu, Chief Economist for the Associated Builders and Contractors, attributes the construction industry’s stability in 2018 to the improved spending in the infrastructure system that includes transit systems, highways, and flood control.
More specifically, Utah’s Department of Transportation (UDOT) reported in 2018 Transportation Asset Management Plan (TAMP), a $24 billion total asset replacement value for pavements using asphalt and other materials.
Likewise, the construction industry is boosted by Utah’s residential construction boom, the redevelopment of an airport, building of a new state prison, $1 billion worth of state road construction, and $600 million worth of school renovation and construction.
Meanwhile, the residential construction had one of its best years in 2005, where a total of 28,285 residential building permits were issued. But from 2006 to 2010, this figure went on a downfall. It started to climb again in 2011, and 2018 logged a total of 24,226 permits issued.
Residential construction seems to be an excellent sector to keep an eye on. Permits issued for condominiums, townhomes and apartment units remained at above the 5,000 levels from 2016 to 2018. This represented an average of about 45,000 closed deals annually for the same period.
But even with these high numbers, the industry is not without challenges. There is a workforce shortage, which affects growth and prevents companies from taking more projects that they could have handled easily under normal circumstances.
Other Industries to Watch
The energy infrastructure and businesses related to it, also impact the state’s economic growth. Building oil and gas pipelines and roadways are inevitably linked. Tourism and outdoor activities, with some that tie into the construction industries, should also be on your radar.
Whether you intend to focus on road infrastructure or vertical projects like condominiums and townhouses, the state’s economic history and overall outlook despite the obstacles suggest favorable conditions to move your business forward.