Utah’s economy expected to be ‘hot’ in 2022, but some could be scorched
At the annual Utah Economic Outlook and Policy Summit on Thursday, Utah Governor Spencer Cox celebrated the state’s current economic strength heading into the 2022 legislative session, one of them hitting a continued economic high and enjoying coffers full of cash ready to fund a slew of projects and initiatives over the coming year.
Cox remained puzzled for highlights of his 2022 state budget proposal, noting proposals for record education spending, critical infrastructure investments in the face of population growth at the nation’s peak, efforts to leverage the state government’s regulatory role to create a larger inventory of affordable housing, a new round of tax relief, and a plan to execute a wholesale overhaul of the state’s economic development handbook.
He also invoked the words of well-known author, Harvard professor and social scientist Arthur Brooks to define the critical role that Utah has assumed, perhaps, as arguably the most economically prosperous country and one that has withstood the trials and challenges of the COVID-19 pandemic better than anywhere.
“I had lunch with (Brooks) last week,” Cox told the audience at the downtown Grand America Hotel. “And he just looked at me and said, ‘I hate to tell you this, but Utah is this country’s last great hope. The way you do things in Utah is the only way our country will survive.
Cox noted that applause comes with a huge burden, but said he thinks Utah has won Brooks’ admiration for its record of fiscal prudence and collaborative problem-solving.
But, he also alluded to the vitriol that has become a hallmark of exchanges across the political and social spectrums and that could, if left unchecked, erode the foundations on which the state has built its success.
“It’s a heavy responsibility that we all carry, but we have to work together,” Cox said. “We can’t talk to each other, we can’t fight for the sake of fighting…and we certainly can’t fight for things that don’t matter.”
Cox also expressed concern that the state’s explosive growth and escalating housing costs could lead to a generational exodus as young people may need to seek more affordable climes when they leave the state. school and enter the labor market. He noted that rural Utahns have known about the problem for years, thanks to the dearth of job opportunities in sparsely populated areas of the state, but which could become pervasive if the state cannot manage the surge in unemployment. housing costs. And he said the next legislative session would see bills focused on smart growth strategies that, while necessary, may not find favor with all audiences.
“The problem is the cost of living is so high that we’re going to have to start exporting our kids if we can’t,” Cox said. “We have to do it right. We cannot afford to become California. We won’t let that happen, at least not under my direction.
Phil Dean, former state budget director and senior public finance fellow for the University of Utah’s Kem C. Gardner Policy Institute, noted that while most Utahns found themselves on the rise in l The state’s strong economy hasn’t been a boon for everyone, and many rural and low-income communities in Utah continue to suffer from high unemployment and limited opportunity.
Dean said escalating cost pressures, signified recently by a federal report that found the United States hit 7% inflation in December, the biggest year-over-year increase in nearly four decades, is hitting families in these Utah communities the hardest.
“People have been left behind in this economic recovery,” Dean said.
Dean noted that the rising costs of basic necessities like food, housing and transportation disproportionately affect Utahans with lower incomes.
“Those with the lowest incomes … feel it and feel it more intensely than those with more discretion in their family budget,” Dean said.
Dean said his one-word prediction for Utah’s economic outlook in 2022 was “hot,” but explained that “there are benefits to getting hot, but you can also get burned.”
Inflation issues featured heavily in comments by Federal Reserve Bank of San Francisco President and CEO Mary Daly, who made a remote appearance at the summit to participate in a conversation moderated by the director. from the Gardner Institute, Natalie Gochnour.
Daly shared an optimistic view of the country’s future economic prospects, but noted that until the coronavirus pandemic is truly abated, “as COVID goes, so does the economy.”
“I’m optimistic that when we get through this, we’ll keep moving forward,” Daly said. “Consumers want to spend, businesses want to open up and people want to work.”
Daly explained how the impacts of COVID-19 have rippled through an interconnected global supply chain with shutdowns in Asia leading to shortages in the United States amid record demand which, itself, is driven by conditions. pandemics that have pushed consumer spending from services to goods. She cited a few examples, including how a two-week closure of a maritime link in Vietnam led to three-month delays in goods passing through that particular port.
She also offered a deeper definition of the Fed’s assertion, offered months ago, that rising inflation would be a “transitory” problem that would fade as broader systems returned to pre-pandemic operations.
Daly said COVID-19 has simply persisted longer than expected and economic impacts like higher than normal demand for goods and supply chain bottlenecks that have exacerbated inflation rates will not will not persist beyond the time pandemic conditions subside.
Daly also reiterated that the Fed’s plans to institute nominal upward adjustments to interest rates over the coming year will not be aimed at “neither stimulating nor pulling the reins” of the US economy.
When asked to weigh in on the year ahead, Daly said she was “optimistic” for 2022 and, pending any further unexpected changes in pandemic conditions, sees a positive economic path. to come, and especially for Utah.
“I see the beginning of a real rebuild from what we’ve been through,” Daly said. “I am very optimistic. Many sectors are still disturbed and not at all back to what they were. These are the people, businesses and areas that we need to attract. Some places, like Utah, will be in the lead and we need everyone to come in and follow.