Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Thu, Mar 19 1992 Date: Thu, 19 Mar 92 05:57:39 EST Message-ID: 03-19 0000 BONUS: Mountain states lead recovery USA TODAY Update March 19, 1992 Source: USA TODAY:Gannett National Information Network When the U.S. economy gets rolling, the recovery will look a lot like what is happening in Salt Lake City and throughout the Rocky Mountain states. This region, which suffered most of its economic troubles the second half of the '80s, has recovered. Now it's leading the pack as the rest of the USA shows signs of emerging from the national recession that began in July 1990. WHERE'S THE EVIDENCE THAT THE ROCKIES ARE RECOVERING? In the suburbs that rise on the western side of the Wasatch mountain range and spread across the Salt Lake Valley toward Provo, builder Ivory Homes expects to sell 250 houses this year. That would be a 7% increase. And the gain would come on top of a 43% increase last year. In a market where "100 homes a year is tremendous for most builders," developers are amazed by the continuing strength of home sales, says Alan Prince, head of Ivory's southern division. WHAT'S BOOSTING HOME SALES: Sales are being driven partly by demand from high-tech workers lured to the area from California and elsewhere by companies such as WordPerfect, the software giant. That's a local phenomenon. But sales also are rising because many Salt Lake City-area residents are taking advantage of low mortgage rates to buy larger homes - a trend that's showing up across the country. WHAT ELSE IS BEHIND THE HOUSING SURGE? Housing also is surging because of basic economics: Few homes were built from 1985 through 1988. Demand was slack because some of the area's biggest employers - such as Kennecott, the copper-, gold-and silver-mining giant - were laying off workers to slash labor costs and boost profitability, a trend now all too familiar to workers across the USA. Salt Lake City's housing industry also was crushed because too many homes were built the first half of the '80s. Now, that glut has been absorbed and fresh demand is spurring construction. That recovery scenario should be repeated nationwide this year and next, economists say. ARE OTHER BUSINESS SECTORS CASHING IN ON THE GROWTH? Along with the housing boom, the Salt Lake Valley economy is getting a boost from some of the best retail activity in years. "We had a record year last year, and this year has been even better," says Gary Broadwater, manager of the John Paras Furniture & Appliance store on South Redwood Road, a highway lined with restaurants, gasoline stations and strip malls. WHAT ABOUT THE REST OF THE MOUNTAIN STATES? "Colorado is definitely outperforming the rest of the nation," says Nancy McCallin, chief economist at the state's Legislative Council. Last year, Colorado building-permit applications rose 25% from 1990 and likely will rise 37% this year, McCallin says. Housing isn't back to the heady days of the early '80s, when high oil prices sent Colorado's economy soaring - in 1983, 51,000 building permits were filed. This year, McCallin expects 20,400. But the trend is in the right direction. WHAT OTHER SIGNS ARE THERE THAT COLORADO'S ECONOMY IS TAKING OFF? Retail sales are flying, up 4.8% last year, vs. a puny 0.7% gain nationwide. Job growth has been healthy because the state attracted numbers of small and medium-size companies after the 1986 oil-price bust devastated the economy. And Colorado consumers are in good financial shape. At the end of last year, just 1.3% of Colorado consumer loans were delinquent, vs. a 3% average nationwide. WHAT'S HAPPENING IN IDAHO? In Idaho, "it looks like we'll escape this (national) recession relatively unscathed," says John Church, chief economist at Idaho Power. One figure that may amaze some real-estate developers: "There's about a 5% office-vacancy rate in downtown Boise," Church says. On the East and West coasts, office-vacancy rates of 20% to 25% are common. And Idaho's job growth is strong. While U.S. employment fell 0.7% last year, the number of jobs in Idaho grew 3.6%. This year, it is expected to grow 2.9%. HAVE HIGH-TECH COMPANIES MADE A MARK IN IDAHO TOO? As in Salt Lake City and Provo, much of Idaho's job growth and demand for commercial space comes from high-tech companies, such as Hewlett-Packard. Its factory, where laser-jet computer printers are made, is among H-P's busiest. In New Mexico, the economy isn't flying as high as in Colorado, Idaho and Utah. But the state is steadily adding jobs as businesses move there to take advantage of low labor costs and an educated workforce, and families move in to get away from crowded cities in other regions. WHO ELSE BESIDES H-P HAS HAD AN IMPACT? Intel, which makes semiconductor chips, has increased its Albuquerque-area employment from 600 in 1985 to 2,100 today. Last year saw a 1.1% increase in New Mexico employment. This year's forecast is for 2%. One result of that growth: Economists expect a 5.6% rise in personal income this year, well above the 4.7% expected nationally. ARE ANY MOUNTAIN STATES WEAK NOW? Even the Rocky Mountain states where growth is weakest - Montana and Wyoming - are better off than the rest of the nation. Resource-rich Wyoming, where 25% of the state's economy is tied to energy and mining, is holding its own because oil prices are steady, says Shelby Gerking, economics professor at the University of Wyoming. Tourism is growing, and prices for cattle and wheat are strong. Still, little job growth is expected in Montana or Wyoming this year, mostly because the sparsely populated states aren't magnets for businesses. ARE THE MOUNTAIN STATES A PERFECT LEADING INDICATOR FOR THE USA? No. For one thing, the region is relatively immune from troubles in the auto and defense industries - the Rockies have few companies in those industries and only a few military bases that may be closed. This year, the U.S. population is expected to grow 1% to 260 million. The four strongest Rocky Mountain states will grow faster, and that growth will stimulate demand for goods and services. Expected population-growth rates this year: Colorado, 1.3%; Idaho, 1.6%; New Mexico, 1.5%; and Utah, 1.9%. WHY ARE THE MOUNTAIN STATES GROWING SO FAST? That growth is partly the result of another advantage the mountain states have: relatively low housing costs and wide-open spaces. "Those are the reasons we'll continue to see migration away from the big cities on the coasts and toward the Rockies," says Jeff Thredgold, Salt Lake City-based economist for Key. WHAT DO WORKERS SEE AS THE ADVANTAGE OF LIVING IN THE MOUNTAINS? Greg Shipe of Cincinnati knows all about those attractions. Becton, Dickinson & Co., a medical-equipment manufacturer, is transferring Shipe to Salt Lake City. "Everything looks pretty good to me," Shipe says outside a model home he toured in suburban Sandy. "I'll be able to get a bigger home for about the same money I can sell my home for back in Cincinnati. And I think my kids (2 1:2 and 7 1:2) will love it here in the mountains." Bonus Editor: Michele Coleman. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. 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