High job growth continues in business-friendly Southern Utah, but wages lag national average

Utah welcome sign | Photo by AndreyKrav/iStock/Getty Images Plus, St. George News

ST. GEORGE — As Utah continues to be among the top states in the country for employment growth, Southern Utah also continues to be among the leading areas in the state for new jobs.

The job growth is thanks in part to a business-friendly environment that has encouraged strong investment in the economy of Utah’s Dixie. But even as job growth continues to outperform the majority of the country, wages in Southern Utah are still well below the national average.

Job growth

According to the latest date compiled by the Utah Department of Workforce Services, nonfarm employment grew an estimated 2.9% in May, adding 44,200 jobs to the state’s economy since this time last year.

In Southern Utah, employment grew by 5.1% in Washington County, adding over 3,000 jobs in the past year, and 4.9% in Iron County, adding about 900 jobs. Both counties are in the top five in the state in terms of job growth.

Charts shows year-over percentage change for nonfarm jobs over a period of 10 years in Utah | Image courtesy of the Utah Department of Workforce Services, St. George News

As of the end of May, the state has a seasonally adjusted unemployment rate of 2.9%, equating to approximately 45,500 people who were actively seeking work during the month. This falls below the national unemployment rate of 3.6 percent.

The latest data from the Department of Workforce Services shows 3% unemployment in Washington County and 3.2% in Iron County, in both cases down about 0.4% since the same time last year.

“This very low unemployment is the good sign of the economy even though we had slowing job growth,” said Mark Knold, senior economist at the Department of Workforce Services. “Because the unemployment rate is so slow, though, it’s a very job-seeker positive market out there.”

Of the 10 employment sectors the department tracks, these job-seekers are gravitating most to education and health services; trade, transportation and utilities; and professional and business services, with about 20,000 jobs added across the three sectors. Percentage-wise, the sectors with the fastest employment growth were in information at 4.7%, manufacturing at 4.7% and education and health services at 3.8%.

Data compiled by the U.S. Bureau of Labor Statistics shows year-over percentage change for nonfarm jobs from May 2018-May 2019 | Image courtesy of the Utah Department of Workforce Services, St. George News

“The most favorable part of looking at the private sector employment is that all 10 of the industry groups that we measure within the private sector are adding jobs over the past 12 months,” Knold said.

In Southern Utah, the top performing sectors in Washington and Iron counties are construction; trade, transportation and utilities; professional and business services; leisure and hospitality; and education and health services.

Business is great, but wages lag

With so many industries adding jobs in Southern Utah, the region has become a focal point for investment in the state.

Using an investment index taking into account business growth, GDP growth, new building permits and federal funding, SmartAsset recently ranked Washington County as the No. 1 county in the state for most incoming investments. Iron County also made it into the top 10 at No. 7.

SmartAsset’s rankings of counties in Utah based on new investments. | Image courtesy of SmartAsset, St. George News

According to SmartAsset’s ranking, Washington County’s GDP growth is $885 million, with 47 new building permits per 1,000 homes, which is substantially higher than the number of new permits issued in most other counties in the rankings and is reflective of the region’s explosive population growth.

Even as business booms in Southern Utah, the average wage of residents in the St. George area is 37% lower than the national average. According the U.S. Bureau of Labor Statistics’ quarterly employment and wages report released June 5, Americans take home an average of $1,144 per week, where those in Washington County take home $723 per week.

While Iron County also has lower wages on average, people living in the Cedar City area generally have a lower cost of living, paying about 14% less than the national average for monthly living expenses, according to the latest data from the Department of Workforce Services. The same can’t be said for people living in St. George, where the cost of living is only 2% lower than the national average.

In a previous St. George News story, senior economist Lecia Langston of the Department of Workforce Services’ St. George office said low average wages is a specific reason companies are attracted to doing business in Washington County.

Some government leaders in Southern Utah are attempting to change this by offering tax incentives to companies that can demonstrate that they offer average wages and benefit packages that are higher than county averages.

The city of St. George is also banking on developments like Tech Ridge on the old airport hill to bring higher-paying jobs for people pursuing work in the technology and information sectors.

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Copyright St. George News, SaintGeorgeUtah.com LLC, 2019, all rights reserved.

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