Economy of Salt Lake City
TheeconomyofSalt Lake City,Utahis primarily service-oriented. While nearbyBingham Canyon Mine(the world's largestopen-pit mine) provided a strong source of income during the 19th century, the city has evolved to an economy built on transit hubs,call centers,and seasonaltourism.The2002 Olympic Winter Gamesgave a great boost to the area's economy. Manyhotelsandrestaurantswere built for the 2002 Olympics, and although many survive, they have suffered post-Olympicmarket saturation.
Companies[edit]
Overview[edit]
Salt Lake City is also the largestindustrial bankingcenter in the United States.[1]The city is known as the "Crossroads of the West" for its central geography in the Census definedwestern United States.Salt Lake is about an equal distance fromLos Angeles,Denver,San Francisco,Portland,Phoenix,andSeattle.As a result,Interstate 15is a major corridor for freight traffic and the area is host to many regional centers such asDannon YogurtandSysco.
World War IIbrought many military and industrial jobs to the Salt Lake Valley.Hill Air Force Basewas activated on November 7, 1940.
Local, state, and federal governments have their largest presence in Salt Lake City, accounting for 21% of employment. Trade, transportation, and utilities account for another 18% of employment, with the major employers being the regionalDelta Air Lineshub atSalt Lake City International Airport.Equally significant are the professional and business services, which account for another 18% of employment. Health services and health educational services comprise an additional 10% of employment. Other major employers include theUniversity of Utah,Sinclair Oil Corporation,andthe Church of Jesus Christ of Latter-day Saints.
The Census estimates that the city's daytime population increases to 313,000 – the second largest increase for cities with at least 100,000 residents. This reflects the fact that a relatively small proportion of metropolitan area residents (18%) live within the city limits.
| Rate of Unemployment* | |
| Year | % |
| 2003 | 6.7 |
| 2002 | 7.3 |
| 2001 | 5.0 |
| 2000 | 3.5 |
| 1999 | 4.0 |
| *UDWS Info | |
Economy sectors[edit]
GDP by industry[edit]
Salt Lake City Industries by GDP value added 2011
| Industry | GDP value added $ billions 2011 | % of total GDP |
|---|---|---|
| Finance and Insurance | 10,419 | 14.58% |
| Real Estate and Rental Leasing | 9,130 | 12.78% |
| Government | 7,768 | 10.87% |
| Durable Good Manufacturing | 6,056 | 8.48% |
| Retail Trade | 4,599 | 6.44% |
| Healthcare and social assistance | 3,567 | 4.99% |
| Construction | 3,004 | 4.20% |
| Non-durable good manufacturing | 2,884 | 4.04% |
| Transportation and Warehousing | 2,600 | 3.64% |
| Information | 2,399 | 3.36% |
| Administrative and Waste Management | 2,240 | 3.13% |
| Other services, except Government | 1,817 | 2.54% |
| Accommodation and Food Services | 1,770 | 2.48% |
| Mining | 1,062 | 1.49% |
| Arts, Entertainment and Recreation | 625 | 0.87% |
| Educational Services | 600 | 0.84% |
| Total | 71,451 | 100% |
Call centers[edit]
It is rumored that call centers prefer the Salt Lake City andProvoareas because of the mild western accent of Utah natives that is easily understood in all regions of the United States, and considered pleasant by many.Marriott Hotels,InterContinental Hotels Group,Delta Air Lines,Continental Airlines,andJetBlue Airwaysall have reservation call centers in Salt Lake City;Sprintalso has a service center in the city.
Convention industry[edit]
A burgeoningconventionindustry has blossomed in recent years. A newconvention center—theSalt Palace—as well as proximity to outdoor recreation has made Salt Lake City an ideal locale for conventions such as the annual Outdoor Retailers meeting. Recently the OIA, Outdoors Industry Association, presented Utah Governor,Gary Herbert,with an ultimatum: "Stop seeking to reverse the designation of Bears Ears National Monument in southeastern Utah" or [they] would take their trade show elsewhere. Herbert was unshaken by the OIA's threats and concluded the two would have to part ways. Said Herbert spokesman, "It shows how a political agenda, rather than reason or merit, seems to have captured the decision-making at the Outdoor Industry Association."[2]
LDS Church[edit]
The LDS Church also provides a large percentage of jobs. Besides its central offices, the Church owns and operates a for-profit wing,Deseret Management Corporation(DMC). Subsidiaries includeBonneville International,which runs bothKSL-TVandKSLAMas well as a number of otherradio stationsin and outside of Salt Lake City. DMC also owns theDeseret Morning NewsandDeseret Book.Smith's Food and Drugis based in the city, but is owned by national grocerKroger.Other notable firms based near the city includeFranklin-Coveyin neighboringWest Valley City,Overstock.comin nearbyCottonwood Heights,andArctic Circle Restaurants(the inventor offry sauce) inMidvale.Salt Lake City was once the headquarters ofZCMI,one of the first everdepartment stores,but it was sold toMay Department Stores,which was later bought byFederated Department Stores.Former ZCMI stores now operate under theMeier & Franklabel, and will soon operate under theMacy'slabel.Delta Air Linesoperates its third-largest hub inSalt Lake City,and along with partnerSkyWest Airlinesis a major employer in the area.
Banking[edit]
Zions Bancorporation,aFortune 1000bank-holding company, has its headquarters in the city.[3]
Since Utah is one of seven states that allow the establishment of commercially owned industrial banks, severalindustrial bankshave legal headquarters in Salt Lake City; they includeUBS,BMW,Merrill Lynch,andTarget.Banks headquartered in nearby cities includeAmerican Express,General Electric,Ally Financial,Goldman Sachs,Morgan Stanley,Fidelity Investments,Sallie Mae,VolkswagenandVolvo.Walmart,Berkshire Hathaway,andHome Depothave applied for bank charters.[1]
Technology[edit]
High-tech firms with a large presence in the city's suburbs includeeBay,Unisys,Siebel,Iomegaand3M.
Potato production[edit]
In 2006 the largest potato producer inIdaho,theUnited Potato Growers of America,announced that it would re-locate its headquarters to Salt Lake City, citing its need for a large international airport, being thatSalt Lake City Internationalis the18th busiest in the worldin terms of combined freight and passengers. The announcement led some members of the Idaho legislature to propose legislation changing the state license plate, which currently reads "Famous Potatoes".[4]
Economic factors[edit]
Major factors that have affected economic activity within the city in the early 21st century have been the2002 Winter Olympics,poverty,andurban sprawl.The 2002 Winter Olympics drove a need for many hotels and restaurants that have now led tomarket saturation.Urban sprawl has created fiercesuburbaneconomic competition resulting in inner-city economic decay. However, studies have shown that increased suburban growth has caused increased construction in the downtown area.[5]By 2006, availability ofClass A office spacehad fallen below 2% for the downtown area, which led to the construction of an eight-story, 230,000 sq. ft. unit forFidelity Investments,located inThe Gateway,and an additional 750,000 sq. ft. of custom office space for companies such asMyriad Genetics,Southern Nevada University and Spillman Technologies.[6]A decade later, a Class Aoffice towerof over 440,000 sq. ft. at 111Main Streetwas planned for completion in late 2016, with an accompanying2,500-seat theaterand mixed use retail and boutique hotel onRegent Street.[7]: 1
Economic indicators in 2005 found that the city, particularly the downtown area, was experiencing increased population growth. The number of residential units in the central business district have increased by 80% since 1995, and is forecast to nearly double in the next decade. Recent sales of high-rise condominiums have been brisk. One 12-story building, The Parc condos at Gateway, had its ground-breaking in 2002 and was sold-out in mid-2005; many new towers are planned within the next decade. One notably large development of over 1,000 units is being built by the LDS Church. This marks a turn in a half century's trend of stagnant population growth in the city contrasted with an average yearly growth rate of 6% in the surrounding suburban area.
Employment[edit]
Employment by industry in Salt Lake City[8]
| Industry | Employment thousands March 2013[8] | Percent of total employment |
|---|---|---|
| Trade, transportation and utilities | 132.2 | 20.4% |
| Professional and business services | 106.5 | 16.14% |
| Government | 100.7 | 15.26% |
| Education and health services | 71.8 | 10.88% |
| Leisure and hospitality | 69.9 | 10.59% |
| Manufacturing | 55.1 | 8.35% |
| Financial activities | 50.6 | 7.67% |
| Mining, logging, and construction | 37.2 | 5.64% |
| Other services | 19.2 | 2.91% |
| Information | 16.5 | 2.50% |
| Total | 659.7 | 100% |
Fiscal Budget[edit]
Salt Lake City Proposed General Fund for the fiscal year 2012–2013[9]
| Revenue by Source | $ thousands | Percent of revenue |
|---|---|---|
| Property Taxes | 63,110 | 30.66% |
| Sales & Use Taxes | 50,795 | 24.68% |
| Other Revenue | 19,713 | 9.57% |
| Licenses & Permits | 18,664 | 9.07% |
| Fines & Forfeitures | 11,341 | 5.51% |
| Intergovernmental Revenue | 5,614 | 2.73% |
| Charges & Fees for Service | 4,937 | 2.40% |
| Parking (Meter and bagging revenue) | 3,255 | 1.58% |
| Total | 205,817 | 100% |
| Expense | $ thousands 2011 fiscal year | Percent of expenses |
|---|---|---|
| Police | 55,249 | 26.8% |
| Non-departmental | 40,028 | 19.44% |
| Fire | 33,658 | 16.35% |
| Public Services | 32,321 | 15.7% |
| Community & Economic Development | 16,958 | 8.24% |
| Attorney's Office | 5,612 | 2.72% |
| Finance | 5,579 | 2.71% |
| 911 Communications Bureau | 5,306 | 2.58% |
| Justice Courts | 4,100 | 1.99% |
| Mayor's Office | 2,612 | 1.27% |
| City Council | 2,341 | 1.14% |
| Human Resources | 2,048 | 1.00% |
| Total | 205,817 | 100% |
References[edit]
- ^The FDIC's Supervision of Industrial Loan Companies: A Historical Perspective.FDIC.gov
- ^Outdoor Retailer is leaving Utah over public lands issues, a move Herbert calls 'offensive' | The Salt Lake Tribune.Sltrib.com. Retrieved on July 4, 2017.
- ^Staff (May 4, 2009)."Utah Companies".Fortune 500 2009.RetrievedSeptember 30,2019.
Zions Bancorporation: Fortune 1000 rank of 666; $3.16 billion in revenue.
- ^Idaho Statesman[dead link]
- ^Swinyard, Kersten. (July 26, 2006)Suburban boom may be fueling projects in Salt Lake.Deseret News. Retrieved on July 4, 2017.
- ^Deseret News Office space hard to find. Vacancy rate for premium sites in downtown S.L. falls below 2%.Deseretnews.com (June 29, 2006). Retrieved on July 4, 2017.
- ^"Marketbeat Office Snapshot Q1 2016, Salt Lake City"(PDF).Cushman & Wakefield Commerce. Archived fromthe original(PDF)on July 22, 2016.RetrievedMay 23,2016.
- ^abSalt Lake City, UT Economy at a Glance.Bls.gov (June 28, 2017). Retrieved on July 4, 2017.
- ^Salt lake City Budget Summary. FISCAL YEAR 2012–2013.slcdocs.com