Why Manufacturing Companies Need Utah on their Radar

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It should be no surprise that Utah—known as the “beehive state”—is busy climbing the ranks as one of the best states for manufacturing.

Utah consistently attracts business expansions due to its busy-bee workforce and quality of life. If your company is expanding or looking to relocate, Utah needs to be on your radar.

To put it simply, manufacturing drives Utah’s economy. Utah is one of the best states in the nation for manufacturing with an employee base of 190,000. According to the Bureau of Economic Analysis and the U.S. Census Bureau, Utah manufacturing output grew from less than $10 billion in 2000 to $17.47 billion in 2014. SmartAsset recently ranked the Ogden-Clearfield metro area as one of the top 10 "Best Places to Work in Manufacturing." Companies from Boeing to Autoliv have found success with their manufacturing facilities in Utah.

In addition, Utah has a young and educated workforce with one of the highest population growth rates in the nation. Utah’s manufacturing and distribution industry has experienced employment growth of over 11 percent in the past five years. The median age in Utah is 30.7 while the average wage is $43,550, which is 10 percent lower than the nation. Utah’s workforce is young, bright and ready to get to work. In fact, there are over 210,000 students enrolled in higher education across 12 major colleges and universities. Utah’s abundant applied technology colleges ensure that the demand for employees will be met as distribution grows over the next few years. Finally, Utah has the third lowest unionization rate in the country at 3.9 percent as a right-to-work state.

From a geographic standpoint, Utah is a hub to all major western cities and states without the west coast expenses. Two major interstates (I-80 and I-15) and all three major rail lines leaving Seattle, San Francisco and Los Angeles ports meet in Salt Lake City. In addition, Salt Lake City International Airport services daily nonstop flights to 19 of the top 20 busiest airports in the nation, including nonstop international flights to Europe, Mexico, and Canada.

Utah’s future is bright due to steadfast support from the pro-business government and community. From 2012 to 2015, Utah’s post-performance tax incentives introduced nearly 25,000 jobs and more than $2.5 billion in investment. Even energy costs are cheaper in Utah, with expenses 26 percent below the national average and the third lowest in the U.S.

Currently, many manufacturing companies have capitalized on Utah for their expansions. Food manufacturer Litehouse Inc. will expand its operations in Hurricane, adding up to 165 jobs and $40 million in capital investment. Whitewave Foods will introduce 105 jobs with $70 million in capital investment to a yet-to-be-disclosed location in Utah.

Fiscally, it just makes sense to the State of Utah. The corporate income tax, average state and local combined sales tax rate and property tax are all significantly less when compared to other markets across the country.

When it comes to manufacturing, Utah truly is the place to be.

Written by: EDCUtah for Utah Policy Daily

25K Jobs for Rural Utah

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When Angela Arnold was laid off at the end of last year, she didn’t know if she would find work that would let her stay in Carbon County. But then she got a job that keeps rural workers home by design. With training and support from a new company, Accelerant BSP, she answers calls from her house for HealthEquity, a Draper-based health savings account firm that manages over $5 billion for more than 3 million customers.

“The idea is ultrasimple: Create rural jobs while filling the needs of the urban company that can’t find adequate talent on the Wasatch Front,” said Joel McKay Smith, CEO of Accelerant Business Solutions Provider.

Even though she took a 50 percent pay cut, Arnold, 43, considers herself fortunate to have a steady job with benefits.
“I’ve grown up here since I was 5,” Arnold said, ”and with the coal mining decline, I’ve seen the community in its best days and this is the worst I’ve ever seen it.”

As the economy in Utah as a whole expands, job losses have devastated some rural counties. Gov. Gary Herbert hopes to see more solutions like Accelerant BSP during his push to create 25,000 jobs off the Wasatch Front in the next four years.
While the governor has heralded the rural push as unprecedented, there’s no clear path forward, and success might not be enough to reverse the trend.

Creating 25,000 jobs in those counties would represent the smallest amount of job growth in any consecutive four-year period this century, outside the Great Recession. From 2004 to 2008, before the recession settled in, rural Utah grew by more than 32,000 jobs. From 2012 to 2016, the counties grew by more than 27,000 jobs.

Economic analysts in the governor’s office said that the goal of 25,000 jobs is ambitious, but achievable, and takes into account the possibility that economic growth of recent years might not continue.

But the Department of Workforce Services (DWS) described the goal as “realistic and conservative.”

It may be easy to create 25,000 jobs in places like Washington and Summit counties, concedes Lt. Gov. Spencer Cox, who is in charge of the 25k Jobs Initiative. But the plan aims to stimulate growth everywhere, he said.  “We have communities that are actively losing jobs and we want to turn those around and make them positive,” Cox said. “While the number is important as a goal, I’m much less focused on that goal than on seeing job creation.”

By early next year, rural economic development officials will give the governor’s office their plans for growing jobs. At this point, there’s no funding earmarked for those efforts.

But rural Utah will need to improve technology infrastructure to “develop a 21st-century economy,” said Don Albrecht, director of the Western Rural Development Center, which works on rural economic development in 13 Western states. “The smartest investment would be to get high-quality internet, high-quality information technology in these places,” he said.

Arnold said Accelerant’s opening gives her hope for her hometown.
“I’m excited that a company will come into our little depressed area and say ‘I believe in you and we see you are valuable,’” she said as she choked back tears. “It’s good to know that somebody cares.”

Utah Prosperity Project

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Utah is consistently recognized as the best performing, most diverse economy in the nation. Over the past seven years, Forbes magazine has named Utah the “Best Place in America for Business and Careers” six times. This kind of success does not happen without great leadership, and in Utah, we are lucky to have Gov. Gary R. Herbert at the helm.

The purpose of the “Utah Prosperity Project” is to highlight Utah’s economic successes and areas for improvement. With that goal in mind, there is no better person to speak with than Gov. Herbert. I had the chance to speak with the governor about future goals for the state and discuss areas we need to focus on if we want to continue to achieve economic success.

Undoubtedly one of the state’s greatest successes is the strength of its economy. To illustrate this, Gov. Herbert noted that Department of Labor Statistics data shows Utah has the best private sector job growth creation rate of any state in America today. But he was careful to note that it is not just about the economy. Utah is doing well in a lot of areas. It has been able to meet its infrastructure needs and demands despite being the fastest growing state in America.

“That’s a significantly heavy lift,” said Gov. Herbert. “We’ve dealt with our infrastructure needs in a fiscally prudent way, while improving efficiency throughout much of our state government by 25 percent. We have fewer state employees today than we did 15 years ago. These things have not been easy, but are necessary for success and prosperity.”

Gov. Herbert circumscribed it all – job creation, the strength of our infrastructure, improvements in education and efficiency in state government – by noting that such successes lead to a great quality of life and economic opportunity. But there is a caveat, he explained. “While the data clearly shows that Utah has enjoyed significant success, we aren’t perfect, and we must not rest on our laurels. There’s much yet to be done.”

When I asked the Governor what he viewed as the state’s greatest challenge he did not hesitate to say growth. Utah’s population is expected to double by 2060 and that growth will put a strain on resources from the state level all the way down to counties, cities and towns. A growing population will impact infrastructure, education systems, supply chains and so much more.

“We need to make sure we can accommodate the state’s projected growth. We need to anticipate it, plan for it, and make sure we are in fact prepared for what is to come. Otherwise, we will experience a diminution in that unmatched quality of life that Utah has achieved through toil and strife. Being prepared is going to take some effort, some coordinated planning, and unprecedented collaboration between all levels of government and the private sector,” he advised.

Forward Looking
So where does the Governor see the state in the next five years?

“I believe that we will continue to have success economically, and we’ll focus on the issues at hand to ensure that our already outstanding quality of life continues to improve.”

Utahns need to be visionary, he added, to see what needs to be done to accommodate the rising generation, so that they have opportunities to enjoy the state’s quality of life.

“We need to continue to look forward, not only at our short-term needs, but also at medium and long-term needs,” he continued. “We want to make sure Utah’s government continues to be an efficient government -- one under which the taxpayer feels that their money is being spent appropriately, and with thoughtfulness.”

Further, he said the state should maintain an appropriate and proper role in safety net services, and added that he will be looking at tax reform and opportunities for the 2018 legislative session.

“Over the next several years, we will try to set the table - not just for 2017 or 2018, but for the next generation,” he said. “The status of the country is somewhat dysfunctional, but Utah will continue to be a leading state. Our long-held conservative principles and heavy reliance on evidence-based policymaking provides an example for other states and for the federal government. If other states or Washington look to what we’re doing here in Utah, they can experience same kind of success we enjoy.”

He emphasized that Utah is becoming an “island of tranquility in the sea of chaos and conflict” we see across the country, and that Utah has an important role to be a good example of what he calls “the Utah way.” That, he said, will help others find a similar path to prosperity.

“Utah,” he added, “is the best place to live, work, and raise a family -- and our goal is that the unmatched lifestyle that is experienced within our state will ever endure.”

by WTC Utah President and CEO Derek Miller