Utah's Prescription for Growth

(EDCUtah) What’s the best medicine for a rebound in Utah’s commercial real estate market? More jobs.

That’s the consensus among EDCUtah’s investors from the commercial real estate market, such as CB Richard Ellis, Coldwell Banker Commercial NRT, Commerce Real Estate Solutions, InterNet Properties, NAI Utah, and Price Realty Group.

Naturally, there are other factors besides jobs that will influence the recovery of the commercial real estate market, but Mark Bouchard, senior managing director of the CB Richard Ellis office in Salt Lake City, says job growth will lead the recovery.

“We need to get people back to work locally and nationally,” he adds.

Steve Bogden, managing director and principal broker for Coldwell Banker Commercial NRT, says the relationship between the job market and the commercial real estate market is an intricate challenge: “As the Utah job market improves, consumer spending will improve. When consumer spending improves, the retail market improves, which leads to the hiring of more people. As more people are hired, the office market improves, too. An improving job market is not the only factor in the recovery, but it is an important one.”

Just What the Doctor Ordered Job growth may be on the horizon. According to a report produced in January for Commerce Real Estate Solutions by the University of Utah’s Bureau of Economic and Business Research (BEBR), the number of job openings posted with the Utah Department of Workforce Services is now running at about double the rate of one year ago: 20,000 versus 10,000.

Meanwhile, initial unemployment claims are down 13 percent compared to a year ago, from an average of 4,150 new claims weekly in January 2009 to 3,600 in January 2010, and the number of temporary workers is growing. An increase in temporary workers is generally considered one of the first signs of a recovering labor market.

The number of temporary workers has increased from 14,800 to 17,700 between April and September of 2009. The BEBR projects that job losses in 2010
will slow to 18,000; down from the 61,000 jobs lost in 2009. In 2011 job gains are expected to be near 20,000, while wages are forecast to increase by $1.6 billion.

Original Article