Zions Bank Municipal Conference Economic Overview August 13, 2015
Overview National Economic Conditions Utah Economic Conditions
Utah is One of the Fastest Growing CA 0.9% States in the Country Percent Change in Population for States: 2012 to 2013 WA 1.1% OR 0.8% NV 1.3% AK 0.7% ID National U.S. Rate = 0.7% VT ND Economic MT 3.1% MN 0.8% SD WI 1.3% MI WY PA IA NE 0.5% OH 0.7% IL IN 0.2% UT Conditions 0.5% WV 1.6% VA CO MO KY - KS 0.9% 1.5% 0.4% NC TN 0.6% AZ OK SC AR NM 1.2% 0.9% 1.1% MS AL GA 0.2% 0.8% HI TX 1.5% LA 0.5% 1.15% or more.075% to 1.10% 0.5% to 0.9% 0% to 0.4% Population Loss FL 1.2% NH NY 0.4% ME -0.01% DC 2.1% CT DE 0.9% MD 0.7% MA 0.7% RI NJ 0.4% Source: U.S Census Bureau
Utah is One of the Fastest Growing CA 0.9% States in the Country How long will interest Percent Change in Population for States: 2012 to 2013 U.S. Rate = 0.7% NH rates stay so low?... WA ME 1.1% VT -0.01% ND MT 3.1% MN OR 0.8% NY 0.8% 0.4% NV 1.3% ID WY SD 1.3% NE OH 0.7% IL IN 0.2% UT 0.5% WV 1.6% VA CO MO KY - KS 0.9% 1.5% 0.4% It s up to the Fed NC TN 0.6% AZ OK SC AR NM 1.2% 0.9% 1.1% DC 2.1% AK 0.7% HI TX 1.5% IA 0.5% WI LA 0.5% MS 0.2% MI AL 1.15% or more.075% to 1.10% 0.5% to 0.9% 0% to 0.4% Population Loss GA 0.8% PA FL 1.2% CT DE 0.9% MD 0.7% MA 0.7% RI NJ 0.4% Source: U.S Census Bureau
Contribution to GDP Growth Consumption Drives Growth 6% 5% Total GDP Growth 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% Fixed Investment Inventories Net Exports Government Personal Consumption 2012 2013 2014 2015 Source: Bureau of Economic Analysis
Payroll Change 000 s National Job Growth Improving 500 300 8.7 Million Jobs Lost 100-100 -300-500 11 Million Jobs Recovered -700-900 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Bureau of Labor Statistics
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 U.S. Unemployment Rates Dropping 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 5.3% in July 3.0 Sources: U.S. Bureau of Labor Statistics, Utah Department of Workforce Services
Feb 2012 Jun 2012 Oct 2012 Feb 2013 Jun 2013 Oct 2013 Feb 2014 Jun 2014 Oct 2014 Feb 2015 Jun 2015 Consumer Confidence is Rising, but Not Robust 110.0 100.0 90.0 80.0 70.0 60.0 50.0 Source: U.S. CCI from The Conference Board and Utah CAI from Cicero Group
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Growth in Consumer Spending Remains Low 5.0 Personal Consumption Expenditure Yearly Percent Change 4.0 3.0 2.0 1.0 0.0-1.0-2.0 Sources: Bureau of Economic Analysis
Jul 2011 Oct 2011 Jan 2012 Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Inflation Remains Very Low 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 0.5% 0.0% -0.5% US Consumer Price Index Year Over Change Source: U.S. CPI from National Bureau of Labor Statistics
Euro compared to U.S. Dollar $1.60 $1.50 $1.40 $1.37 $1.30 $1.20 $1.10 $1.00 PARITY $1.11 $0.90 $0.80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Investing.com
$6.00 $6.50 $7.00 $7.50 $8.00 US Dollar Compared to Chinese Yuan Inverted Scale 2008 China stops the yuan s rise 2001 China joins WTO 2005 China allows the yuan to rise 2010 China allows the yuan to rise Aug 2015 China devalues the yuan by largest amount in 20 years $8.50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Federal Reserve Bank of St Louis, Wall Street Journal
Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 $ Per Barrel Oil Prices Much Below Long Term Trend 160 140 120 $105 100 80 60 40 $43 20 0 Source: U.S. Federal Reserve
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 U.S. vs. Utah Oil Production Crude Oil Production: Barrels in Thousands 45000 3500000 40000 3000000 35000 30000 2500000 25000 2000000 20000 1500000 15000 10000 5000 1000000 500000 0 0 Utah U.S. Source: U.S. Energy Information Administration
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 30 Year Mortgage Rate, Fed Rate and CPI 7.0 6.0 5.0 Effective Fed Rate 30 Year Fixed Mortgage CPI Year Over Change Rate - Unadjusted 4.0 3.0 2.0 1.0 0.0-1.0-2.0 Source: U.S. Federal Reserve and National Bureau of Labor Statistics
Federal Funds Rate Outlook Median FOMC Forecast 1.875% 0.25% 2 moves 25 bps 0.625% 4 moves 25 bps $0 $0 $0 Mar Jun Sep Dec Mar Jun Sep Dec 2015 2016 Source: Source: American Bankers Association Analysis of Data from the Federal Reserve
Utah is One of the Fastest Growing CA 0.9% States in the Country Percent Change in Population for States: 2012 to 2013 U.S. Rate = 0.7% NH Utah Economic WA ME 1.1% VT -0.01% ND MT 3.1% MN OR 0.8% NY 0.8% ID SD WI 0.4% NV 1.3% AK 0.7% WY PA IA Conditions NE 0.5% OH 0.7% IL IN 0.2% UT 0.5% WV 1.6% VA CO MO KY - KS 0.9% 1.5% 0.4% NC AZ 1.2% HI NM 1.3% TX 1.5% OK 0.9% AR LA 0.5% MS 0.2% MI TN 0.6% AL 1.15% or more.075% to 1.10% 0.5% to 0.9% 0% to 0.4% Population Loss SC 1.1% GA 0.8% FL 1.2% DC 2.1% CT DE 0.9% MD 0.7% MA 0.7% RI NJ 0.4% Source: U.S Census Bureau
Utah Population Seventh Fastest Growing in U.S. CA OR 1.1% WA 1.3% NV 1.7% ID 1.3% UT 1.4% AZ 1.5% AK - MT 0.9% WY 0.2% CO 1.6% NM - HI 0.8% Percent Change: 2013 to 2014 U.S. Rate = 0.7% ND 2.2% SD 0.9% NE 0.7% TX 1.7% KS OK 0.6% MN 0.6% IA 0.5% MO AR WI LA 0.4% IL - MS MI IN 0.4% TN 0.8% AL or more OH 0.2% KY 0.7% to 0.9% (at or above U.S. rate) 0.4% to 0.6% 0.0% to Population Loss WV -0.2% VT 0.0% PA 0.0% NC SC 1.3% GA VA 0.7% FL 1.5% NH NY ME DC 1.5% CT - DE 1.1% MD 0.6% MA 0.5% RI 0.2% NJ Source: U.S Census Bureau
Utah Population Growth Rates By County 2013 to 2014 Box Elder 1.3% Tooele 1.4% Davis 2.1% Cache 0.9% Weber 0.9% Morgan 4.0% Salt Lake Utah 1.6% Rich 0.7% Summit 1.7% Wasatch 4.3% Duchesne 1.4% Daggett -1.2% Uintah 3.3% State Average = 1.4% Juab 1.5% Carbon -1.3% Increase of 2.0% or Greater Millard -0.2% Sanpete 0.8% Sevier - Emery -0.8% Grand 0.7% Increase of 1.5% to 1.9% Beaver 0.0% Piute -2.6% Wayne - Increase of to 1.4% Iron 1.2% Garfield -0.8% Increase of 0.0% to 0.9% San Juan 1.7% Population Loss Washington 2.9% Kane 0.2% Source: U.S. Census Bureau
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 Utah Components of Population Change 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0-10,000-20,000 Population Change Natural Increase Net Migration Source: Utah Population Estimates Committee, U.S. Census Bureau, State of Utah Revenue Assumptions Working Group
Employment Growth by State CA 3.0% OR 3.2% WA 3.5% NV 3.5% AK 0.2% ID 2.6% UT 4.3% AZ 2.0% Percent Change in Employment for States: June 2014 to June 2015 U.S. Rate = 2.1% MT 0.5% WY -0.7% HI 1.5% CO 2.7% NM 1.3% ND 0.5% SD 2.3% NE 0.4% KS 0.8% TX 2.3% OK 0.6% MN 1.3% IA 1.5% MO 0.8% AR 2.0% WI 1.3% LA 0.7% IL 0.8% MS MI 2.2% IN 2.0% TN 2.2% AL 1.4% 2.7% or more OH 1.3% KY 2.2% GA 2.6% WV -1.2% VT 1.5% PA NC 2.4% SC 2.9% VA 1.3% FL 3.4% NH 1.1% NY 1.7% 2.1% to 2.6% (at or above the U.S. rate) 1.3% to 2.0% 0.8% to 1.2% ME 0.6% DC 1.2% CT 1.6% DE 1.7% MD 1.5% MA 2.1% RI 1.2% NJ Note: Seasonally Adjusted Source: Bureau of Labor Statistics 0.7% and below
Top States for Employment Growth June 2014 vs. June 2015 Top 10 June 2014 June 2015 Ranking 1. North Dakota 46th 2. Nevada 2nd 3. Utah 1st 4. Texas 13th 5. Florida 4th 6. Colorado 8th 7. Oregon 5th 8. Delaware 21st 9. California 6th 10. Washington 3rd 38. Idaho 9th Source: Bureau of Labor Statistics
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Thousands of Jobs Utah Total Employment at New Highs 1,600 1,500 1,400 Gain of 189,000 jobs 1,300 1,200 1,100 1,000 Loss of 91,000 jobs 900 800 Source: U.S. Bureau of Labor Statistics Note: January 2015 (prediction)
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f 2016f Annual Rate of Change in Utah Nonagricultural Employment 8.0% 6.0% 1980-2016 Average 2.6% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% Source: Utah Department of Work Force Services e = Estimate, f = Forecast
Utah Employment Change Rates By County June 2014 to June 2015 Box Elder 2.0% Tooele Davis 3.8% Cache 2.5% Rich 2.0% Weber 4.0% Morgan 3.9% Salt Lake 3.5% Utah 6.0% Summit 2.5% Wasatch 7.0% Duchesne -9.4% Daggett 1.5% Uintah -5.7% State Rate = 4.5% Juab 5.9% Carbon 3.1% 4.5% or more Millard 2.3% Sanpete 3.0% Sevier 2.4% Emery -9.1% Grand 1.9% 3.1% to 4.4% Beaver 4.9% Piute 0.6% Wayne 2.2% 2.1% to 3.0% 0.0% to 2.0% Iron 3.4% Garfield 2.2% San Juan 2.2% Below 0.0% Washington 5.4% Kane 1.4% Source: Utah Department of Workforce Services, Not seasonally adjusted
UT Industries - Employment Gains Ntl. Res. & Mining Construction Manufacturing Trade, Trans., Utilities Information Financial Activity Prof. & Bus. Serv. Ed. & Health Serv. Leisure & Hospitality Other Services Government Percent Change in Utah Employment by Industry -7.3% Total: 4.5% 3.3% 4.0% 3.5% 7.2% 5.7% 6.7% 5.0% 1 1.8% -13% -8% -3% 2% 7% 12% Source: Utah Department of Workforce Services
UT Industries Seeing Growth Ntl. Res. & Mining Construction Manufacturing Trade, Trans., Utilities Information Financial Activity Prof. & Bus. Serv. Ed. & Health Serv. Leisure & Hospitality Other Services Government -900 Total Change in Utah Employment by Industry Total: 59,200 2,700 4,900 8,900 2,400 4,200 12,300 8,500 13,200 700 2,300-2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Source: Utah Department of Workforce Services
Utah Has 3 rd Lowest Unemployment Rate in the Country OR 5.5% CA 6.3% WA 5.3% NV 6.9% ID 4.0% UT 3.5% AZ 5.9% MT 3.9% WY 4.1% CO 4.4% NM 6.4% July 2015 U.S. Rate = 5.3% ND 3.1% SD 3.8% NE 2.6% KS 4.5% OK 4.5% MN 3.9% IA 3.7% MO 5.8% AR 5.7% WI 4.6% IL 5.9% MS 6.6% MI 5.5% IN 4.9% TN 5.7% AL 6.1% OH 5.2% KY 5.1% GA 6.1% WV 7.4% VT 3.6% PA 5.4% NC 5.8% SC 6.6% VA 4.9% NH 3.8% NY 5.5% ME 4.7% DC 7.0% CT 5.7% DE 4.7% MD 5.2% MA 4.6% RI 5.9% NJ 6.1% AK 6.8% TX 4.2% LA 6.4% 4.0% or less FL 5.5% 4.1% to 4.6% HI 4.0% 4.7% to 5.5% (at or below the U.S. rate) 5.6% to 6.0% 6.1% or more Note: Seasonally Adjusted Source: Bureau of Labor Statistics
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Utah vs. U.S. Unemployment Rates 10.0 8.0 6.0 4.0 2.0 0.0 U.S. Utah Sources: U.S. Bureau of Labor Statistics, Utah Department of Workforce Services
Utah Unemployment Rates By County June 2015 Box Elder 3.6% Tooele 3.9% Cache 2.9% Weber 3.9% Davis 3.3% Salt Lake 3.2% Morgan 3.2% Utah 3.1% Rich 3.3% Summit 3.2% Wasatch 3.2% Duchesne 6.7% Daggett 4.6% Uintah 5.8% Juab 3.8% Carbon 5.4% State Rate = 3.5% 3.2% or lower Millard 3.4% Sanpete 4.0% Sevier 4.2% Emery 5.8% Grand 5.6% 3.3% to 3.5% Beaver 3.8% Piute 6.0% Wayne 8.7% 3.6% to 4.5% Iron 4.2% Garfield 8.3% 4.6% to 5.9% Washington 4.0% Kane 4.2% San Juan 6.9% 6.0% or greater Source: Utah Department of Workforce Services
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f 2016f Slow Growth in Utah Average Annual Pay 6.0% 5.3% 5.4% 5.5% 5.0% 4.0% 4.0% 3.7% 4.8% 4.8% 4.4% 4.1% 3.7% 3.8% 3.5% 3.6% Average Growth 3.0% 3.0% 3.2% 2.6% 2.3% 2.4% 2.8% 2.6% 2.2% 2.4% 3.1% 2.4% 2.0% 1.6% 1.6%1.6% 1.6%1.6% 1.6% 1.2% 0.0% Source: Utah Department of Workforce Services e = estimate f = forecast
Underemployment Remains High Sources: Bureau of Labor Statistics, Macrotrends.net
Feb 2012 May 2012 Aug 2012 Nov 2012 Feb 2013 May 2013 Aug 2013 Nov 2013 Feb 2014 May 2014 Aug 2014 Nov 2014 Feb 2015 May-15 US Consumer Confidence Index vs. UT Consumer Attitude Index 120.0 110.0 100.0 90.0 80.0 70.0 60.0 Zions Bank Utah Consumer Attitude Index United States Consumer Confidence Index 50.0 Source: U.S. CCI from The Conference Board and Utah CAI from Cicero Group
Jul 2011 Jan 2012 Jul 2012 Jan 2013 Jul 2013 Jan 2014 Jul 2014 Jan 2015 Consumer Price Index Change Rate Wasatch Front vs. United States 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 0.5% 0.0% -0.5% - Year Over Year Change United States CPI Zions Bank Wasatch Front CPI Source: U.S. CPI from National Bureau of Labor Statistics and Wasatch Front CPI from Cicero Group
1970 1975 1980 1985 1990 1995 2000 2005 2010 National Housing Starts New Housing Units by Permit Type 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Single-Family Units Multifamily Source: U.S. Department of Commerce and U.S. Census Bureau
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015f Utah Residential Construction Activity 25,000 20,000 15,000 10,000 5,000 0 Single-Family Units Multifamily Source: University of Utah, David Eccles School of Business, Bureau of Economic and Business Research
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Thousands U.S. vs. UT Median Existing Home Prices $240 $220 $200 $180 $160 $140 $120 Utah United States Source: Moody s Analytics
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015f 2016f Millions UT Value of New Construction $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Residential Nonresidential Renovations Total Source: University of Utah, David Eccles School of Business, Bureau of Economic and Business Research f = forecast
Utah Below National Average Foreclosure Rates CA 1.10% WA 2.04% OR 2.74% NV 3.33% AK 0.89% ID 1.32% UT 1.06% AZ 0.85% Note: Seasonally Adjusted, Second Quarter 2014 Source: Moody s Economy.com MT 0.87% WY 0.52% HI 3.88 % CO 0.86% NM 2.92% U.S. 2.49%, Utah 1.06% ND 0.68% SD 0.87% NE 0.72% KS 1.50% TX 1.01% OK 2.40% MN 0.94% IA 1.63% MO 1.08% AR 1.69 % WI 1.71% LA 2.11% IL 3.68% MS 1.73% MI 1.22% IN 2.54% TN 1.25% OH 2.88% KY 2.24% AL 1.43%.99% or lower 1.00% to 1.48% 1.49% to 2.48% 4.00% or more WV 1.12% VT 2.96% PA 2.81% VA 0.91% NC 1.44% SC 2.41% GA 1.46% FL 6.91% NH 1.35% NY 5.89% ME 4.51% DC 2.59% 2.49% to 3.99% (at or above national average) CT 3.96% DE 2.95% MD 3.24% MA 1.95% RI 2.80% NJ 8.10%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Foreclosure Rates Dropping 12.0 10.0 8.0 6.0 4.0 2.0 0.0 United States Utah Nevada Source: Federal Housing Finance Agency and Economy.com
Utah Has One of Most Diverse Economies in Nation Ten Most Diversified Economies in the Country 2012 Missouri 98.4 North Carolina Illinois Utah 97.6 97.5 97.5 Arizona 97.2 Georgia Kansas Maine Nebraska 96.9 96.7 96.6 96.5 Minnesota 95.8 93.0 94.0 95.0 96.0 97.0 98.0 99.0 100.0 Source: DWS - Workforce Research and Analysis Division
Three-Year Average Annual Population Growth Rate 2011-2013 1.6% 1.4% 1.2% 1.1% 1.1% 1.4% Average Population Growth Rate 1.5% 1.1% 0.8% 0.7% 0.9% 0.8% 0.6% 0.4% 0.2% 0.0% United States Mountain States Arizona Colorado Idaho Montana Nevada New Mexico Utah Wyoming Source: U.S. Census Bureau
Average Annual Employment Growth Rate 2010-2013 3.5% 3.0% 2.5% 2.3% Average Employment Growth Rate 1.7% 2.9% 2.0% 1.6% 1.9% 1.8% 1.9% 1.6% 1.7% 1.5% 0.5% 0.0% United States Mountain States Arizona Colorado Idaho Montana Nevada New Mexico Utah Wyoming Source: U.S. Bureau of Labor Statistics
Average Annual GDP Growth Rate 2010-2013 4.5% 4.0% 3.9% 3.5% 3.0% 2.8% 2.9% Average Annual GDP Growth Rate 2.2% 2.5% 2.4% 2.3% 2.0% 2.0% 2.0% 1.5% 1.4% 1.3% 1.3% 0.5% 0.0% United States Mountain States Arizona Colorado Idaho Montana Nevada New Mexico Utah Wyoming Source: U.S. Bureau of Economic Analysis
Utah Economic Indicators 2014-2016 Population 1.4 1.5 1.5 Nonfarm Employment 2.9 2.8 2.6 Unemployment Rate 3.7 3.4 3.2 Personal Income 4.7 5.2 5.1 Home Prices 2.0 5.3 8.9 Retail Sales 4.6 4.9 5.3 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2014e 2015f 2016f Source: State of Utah Revenue Assumptions Working Group e = estimate f = forecast
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