Uinta Basin Energy Summit Economic Overview September 10, 2015
Overview National Economic Conditions Utah Economic Conditions
Utah is One of the Fastest Growing CA States in the Country Percent Change in Population for States: 2012 to 2013 WA 1.1% OR 0.8% NV 1.3% AK ID National U.S. Rate = VT ND Economic MT 3.1% MN 0.8% SD WI 1.3% MI WY PA IA NE 0.5% OH IL IN 0.2% UT Conditions 0.5% WV 1.6% VA CO MO KY - KS 1.5% 0.4% NC TN 0.6% AZ OK SC AR NM 1.2% 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% to 0.4% Population Loss FL 1.2% NH NY 0.4% ME -0.01% DC 2.1% CT DE MD MA RI NJ 0.4% Source: U.S Census Bureau
Utah is One of the Fastest Growing CA States in the Country How long will interest Percent Change in Population for States: 2012 to 2013 U.S. Rate = 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 IL IN 0.2% UT 0.5% WV 1.6% VA CO MO KY - KS 1.5% 0.4% It s up to the Fed NC TN 0.6% AZ OK SC AR NM 1.2% 1.1% DC 2.1% AK 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% to 0.4% Population Loss GA 0.8% PA FL 1.2% CT DE MD MA RI NJ 0.4% Source: U.S Census Bureau
Payroll Change 000 s National Job Growth Improving 500 300 8.7 Million Jobs Lost 100-100 -300-500 11.9 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 5.1% in Aug 3.0 Sources: U.S. Bureau of Labor Statistics, Utah Department of Workforce Services
Feb 2012 Aug 2012 Feb 2013 Aug 2013 Feb 2014 Aug 2014 Feb 2015 Aug 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
Contribution to GDP Growth Consumption Drives Growth 5% Total GDP Growth 0% -5% Fixed Investment Inventories Net Exports Government Personal Consumption 2012 2013 2014 2015 Source: Bureau of Economic Analysis
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 Source: 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 Jul 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% Source: U.S. CPI from National Bureau of Labor Statistics
US Dollar Compared to Chinese Yuan Inverted Scale $6.00 $6.50 $7.00 $7.50 $8.00 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
Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 $ Per Barrel Oil Prices Show Volatility After Recent Lows $120.00 $110.00 West Texas Intermediate $108 $100.00 $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $38 Sources: U.S. Energy Information Administration and Quotenet.com
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ Per Barrel Oil Prices Rising But Still Below Long Term Trend 160.00 140.00 120.00 $108 100.00 80.00 60.00 40.00 $38 20.00 0.00 Source: U.S. Federal Reserve
2007 2008 2009 2010 2011 2012 2013 2014 2015 2,200 Active U.S. Oil Rigs 2,000 1,931 1,800 1,600 1,400 1,200 1,000 800 868 Sources: Baker Hughes
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 States in the Country How long will interest Percent Change in Population for States: 2012 to 2013 U.S. Rate = 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% AK ID UT 1.6% AZ 1.2% SD 1.3% WI WY PA IA NE 0.5% OH Emotion IL IN vs 0.2% 0.5% WV VA CO MO KY - KS 1.5% 0.4% NC TN 0.6% OK SC Fundamentals AR NM 1.1% MS AL GA 0.2% 0.8% TX LA 1.5% 0.5% HI MI 1.15% or more.075% to 1.10% 0.5% to 0% to 0.4% Population Loss FL 1.2% DC 2.1% CT DE MD MA RI NJ 0.4% Source: U.S Census Bureau
Utah is One of the Fastest Growing CA States in the Country Percent Change in Population for States: 2012 to 2013 U.S. Rate = 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 WY PA IA Conditions NE 0.5% OH IL IN 0.2% UT 0.5% WV 1.6% VA CO MO KY - KS 1.5% 0.4% NC AZ 1.2% HI NM 1.3% TX 1.5% OK AR LA 0.5% MS 0.2% MI TN 0.6% AL 1.15% or more.075% to 1.10% 0.5% to 0% to 0.4% Population Loss SC 1.1% GA 0.8% FL 1.2% DC 2.1% CT DE MD MA RI NJ 0.4% Source: U.S Census Bureau
Utah Population 7 th 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 WY 0.2% CO 1.6% NM - HI 0.8% Percent Change: 2013 to 2014 U.S. Rate = ND 2.2% SD NE 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 to (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 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
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
Utah Population Growth Rates By County 2013 to 2014 Box Elder 1.3% Tooele 1.4% Davis 2.1% Cache Weber Morgan 4.0% Salt Lake Utah 1.6% Rich 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 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 San Juan 1.7% Population Loss Washington 2.9% Kane 0.2% Source: U.S. Census Bureau
Utah s Employment Growth Highest in the Country CA 3.2% OR 3.2% WA 3.3% NV 3.7% AK 0.0% ID 2.7% UT 4.4% AZ 2.1% Percent Change in Employment for States: July 2014 to July 2015 U.S. Rate = 2.1% MT WY 0.2% HI 1.2% CO 2.0% NM 0.5% ND -0.6% SD 2.1% NE 0.2% KS 0.4% TX 2.3% OK 0.6% MN IA 2.0% MO 1.4% AR 2.4% WI 1.6% LA 0.4% IL MS 1.4% MI 2.3% IN 2.1% TN 1.9% AL 1.4% 2.7% or more OH 1.1% KY 1.6% GA 2.1% WV -2.5% VT 1.5% PA 1.1% NC 2.7% SC 2.8% VA 1.1% FL 3.5% NH 1.2% NY 1.8% 2.1% to 2.6% (at or above the U.S. rate) 1.3% to 2.0% 0.8% to 1.2% ME DC 1.9% CT 1.8% DE 1.7% MD 2.1% MA 2.0% RI 1.3% NJ 0.5% Note: Seasonally Adjusted Source: Bureau of Labor Statistics and below
Top States for Employment Growth July 2014 vs. July 2015 Top 10 July 2014 July 2015 Ranking 1. North Dakota 49th 2. Nevada 2nd 3. Utah 1st 4. Texas 11th 5. Colorado 18th 6. Florida 3rd 7. Delaware 25th 8. Oregon 6th 9. Arizona 13th 10. Washington 4th 31. Idaho 8th Source: Bureau of Labor Statistics
Utah Total Employment at New Highs 1,600 1,500 1,400 Gain of 189,000 jobs Thousands of Jobs 1,300 1,200 1,100 1,000 900 800 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Loss of 91,000 jobs Source: U.S. Bureau of Labor Statistics Note: January 2015 (prediction)
UT Industries - Employment Change Percent Change in Utah Employment by Industry: July 2014 to July 2015 Ntl. Res. & Mining -6.5% Total: 4.5% Construction 2.2% Manufacturing 4.8% Trade, Trans., Utilities 3.4% Information Financial Activity 4.4% 5.1% Prof. & Bus. Serv. Ed. & Health Serv. 5.7% 6.3% Leisure & Hospitality 10.5% Other Services 3.4% Government 1.1% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% Source: Utah Department of Workforce Services
Most UT Industries Seeing Growth Ntl. Res. & Mining -800 Total Change in Utah Employment by Industry: July 2014 to July 2015 Total: 59,100 Construction 1,800 Manufacturing 5,800 Trade, Trans., Utilities 8,600 Information 1,700 Financial Activity 3,300 Prof. & Bus. Serv. 11,700 Ed. & Health Serv. 9,600 Leisure & Hospitality 13,700 Other Services 1,300 Government 2,400-2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Source: Utah Department of Workforce Services
Utah Employment Change Rates By County July 2014 to July 2015 Box Elder 2.3% Tooele Davis 3.8% Cache 2.3% Rich 2.2% Weber 3.8% Morgan 3.1% Salt Lake 3.7% Utah 6.2% Summit 2.7% Wasatch 3.8% Duchesne -9.2% Daggett 1.7% Uintah -6.9% State Rate = 4.5% Juab 6.1% Carbon 3.3% 4.5% or more Millard 1.1% Sanpete Sevier 2.6% Emery -7.5% Grand 2.1% 3.1% to 4.4% Beaver 5.1% Piute 0.8% Wayne -0.4% 2.1% to 3.0% 0.0% to 2.0% Iron 1.6% Garfield 2.4% San Juan 2.2% Below 0.0% Washington 5.4% Kane 1.6% Source: Utah Department of Workforce Services, Not seasonally adjusted
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 July 2015 Box Elder 3.7% Tooele 4.1% Cache 3.1% Weber 4.0% Davis 3.5% Salt Lake 3.4% Morgan 3.2% Utah 3.3% Rich 3.6% Summit 3.2% Wasatch 3.4% Duchesne 7.2% Daggett 4.5% Uintah 6.4% Juab 3.8% Carbon 5.7% State Rate = 3.6% 3.3% or lower Millard 3.5% Sanpete 4.1% Sevier 4.4% Emery 6.1% Grand 5.8% 3.4% to 3.6% Beaver 3.9% Piute 5.9% Wayne 8.7% 3.7% to 4.5% Iron 4.5% Garfield 8.4% 4.6% to 6.5% Washington 4.2% Kane 4.4% San Juan 7.6% 6.6% or greater Source: Utah Department of Workforce Services
Jul 2011 Jan 2012 Jul 2012 Jan 2013 Jul 2013 Jan 2014 Jul 2014 Jan 2015 Jul 2015 Consumer Price Index 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
Feb 2012 Aug 2012 Feb 2013 Aug 2013 Feb 2014 Aug 2014 Feb 2015 Aug 2015 US Consumer Confidence Index vs. UT Consumer Attitude Index 120.0 Above 110 indicates economic prosperity 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
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 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
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 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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