Report: Job growth in Utah slows

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OGDEN -- A slump in new home construction along the Wasatch Front helped drop job growth in Utah to its lowest level in more than four years last month, a new report shows.

While the statewide unemployment rate of 3 percent in February was unchanged from January, job growth fell to 2.3 percent, the Utah Department of Workforce Services reported Tuesday. That's down from 2.6 percent in January and 2.9 percent in December.

The decline in job growth continues a slide that began last year after growth peaked at more than 5 percent late in 2006.

Mark Knold, senior economist for DWS, said residential construction activity in Utah went from "boom to lethargy" in just six months.

"It's time to recognize that Utah's construction industry is shedding jobs," Knold said.

"That means that not only have jobs been lost, but the job-loss trend will continue."

The construction sector in Utah, which was adding jobs at a frantic 16 percent annual pace only a year ago, saw a 1.3 percent drop in employment last month compared with a year earlier.

Another new report found that February was the slowest month in at least 18 years for new building permits along the Wasatch Front.

According to the trade publication "Construction Monitor," 261 permits for new homes were issued in the area last month, down nearly 72 percent from the 928 permits issued in February 2007.

Last month's number was the lowest since Construction Monitor began tracking permits in 1990.

Knold said Utah's home prices will have to fall in line with stricter mortgage lending standards before the local housing market can recover.

"When housing prices fall enough to combine with lending rates to once again equate affordability, only then will Utah start to again build houses in mass," he said.

"In the interim, construction will now be a drag upon the economy."

Despite the struggles in construction, Utah still compares favorably with the United States as a whole. Nationwide, unemployment was 4.8 percent and employment growth was 0.6 percent in February.

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