Utah Valley continues to be a main driver for the state’s economy, according to several experts who spoke at the Utah Valley Chamber of Commerce annual Executive Summit on Friday. However, to maintain the rate of growth, many of the event’s speakers highlighted the need to strike a “proper balance.”
Although low unemployment rates are typically touted as a sign of economic well-being, Utah and Utah County’s extraordinarily low unemployment rate — 2.8% and 2.6% respectively — is actually dangerous, Wells Fargo senior investment strategist Steven Olson said.
Low unemployment rates mean there isn’t a large enough talent pool to pull from as companies look to expand, Olson explained. In fact, the low unemployment rate leads to a decrease in productivity when people are hired, because companies are forced to hire people who aren’t as qualified and train them in-house.
At least, Brandon Fugal, Chairman of Colliers International in Utah pointed out, Utah County’s economy continues to be diverse and not solely dependent on tech. Fugal specifically referenced the growing campuses of doTerra and Young Living as examples.
“We have the most diversified economy and market in the country,” Fugal said. “The health and wellness sector is alive and well in driving our economy ... just as much as the tech sector.”
Fugal shared updates on a number of commercial real estate developments in Utah County, the majority of which are destined to be office space. A handful of office spaces, Fugal said, is being built on a “speculative” basis without being leased — developers are just confident the demand and need for office space will continue to grow. One development, a six-story building in Pleasant Grove, is 70% leased even though the building itself isn’t even finished, Fugal said.
“(It’s) indicative of the dynamic economy we find ourselves in right now,” Fugal said.
According to Fugal, despite Utah Valley having a smaller population than Salt Lake County, the amount of real estate development in both counties is equal — and Utah County might even have a little bit more.
Of course, questions and doubts remain with the fear of recession and the unpredictability of market timing, Fugal said.
“Can we sustain this level of growth and development and velocity, in Utah County in particular?” Fugal asked. He turned to his favorite movie, “The Karate Kid,” for his answer, sharing a clip of Mr. Miyagi counseling the main character about balance.
“As long as we see balanced growth, and a proper balance struck between supply and demand in our market, I think we can sustain the incredible renaissance that we’re taking part in,” Fugal said.
In terms of recession fears, Olson also seemed mostly positive, stating he believes that any recession would likely hit Utah County last, and not last too long because of the county’s momentum.
Alan Matheson, the still fairly new executive director of the Point of the Mountain State Land Authority, spoke a lot about balance while giving an update on plans for the development of the Draper prison site. The development of the 700-acre site is a “once in a lifetime opportunity,” Matheson said, that will affect people for generations.
Principles guiding the development, according to Matheson, have been set by the Utah Legislature and include maximizing job creation, creating a highly trained workforce, and emphasizing the quality of life for people on site and in surrounding areas.
One of the major goals for quality of life, Matheson said, is being strategic in both commercial and residential growth — ideally building a community that has affordable housing so people can live where they work, as well as creating a “world class transit” infrastructure so people commute less, leading to better air quality.
One of the legislative goals is also to build a world-class research center on the site, Matheson said. If the site is developed well, Matheson said they can create 150,000 jobs that will increase the average household income on the Wasatch Front by $10,000 a year by 2050, as well as increase state and tax revenue to fund education and other resources.
“We need to be thinking regionally (and) broadly about how this place can be a catalyst,” Matheson said. “We need to be thinking well into the future.”
The development is still in its infancy, and Matheson said he plans to have an open and transparent process for gathering public input, to coordinate with local jurisdictions about development, and more to ensure the best development possible.
“We’ll be thinking big thoughts, and we want you to think creatively with us,” Matheson said.
Clint Betts, executive director of Silicon Slopes, also encouraged attendees to think about balance and strive to “share the wealth,” so to speak. He spoke about his concerns of the growing class divide being created by the success of the tech industry in Silicon Slopes, and urged attendees to work for solutions that will prevent Silicon Slopes from becoming like Silicon Valley, where people not in the tech industry have been priced out of homes. Betts suggested doing this by extending opportunities.
“We need to make sure we are extending the access to the opportunity that exists in the business and tech community to everyone, not just a few,” Betts said.
A Spanish Fork native himself, Betts said one way Silicon Slopes is working to equalize opportunity is by getting computers into every school by 2022. Betts also asked attendees to be intentional about the types of developments, housing and transit, that are built.
“We cannot let the rest of the Utahns who are not a part of the success right now be left out,” Betts said. “Otherwise we’re not Utah, we’re Silicon Valley, and ... what we love about this community no longer exists.”