The Changing Utah County Economy

By Lyndsey Stram, Regional Economist, Department of Workforce Services

In the past 20 years, Utah County has grown quickly and consistently. Provo/Orem was recently ranked the ninth fastest-growing metropolitan area between 2010 and 2019 according to the U.S. Census Bureau, and there have been many factors playing into the growth and changes across the past two decades. The main stronghold of the local area’s economy had been education, but Utah County is no longer simply an education hub. The overall economic makeup has shifted and the area has developed a niche technology specialization.

Figure 1: Utah County Nonfarm Employment, 2000-2019

Source: Utah Department of Workforce Services

Utah County’s nonfarm employment has grown steadily in the past 20 years, seeing an almost 75% increase during the period. The Great Recession of 2008-2010 put a two-year pause in this procession, but there has been significant growth since 2010. Population growth, both internal natural increase and external in-migration, have aided job growth by providing a steady supply of workers.

Figure 2: Industry Employment Percent Change, 2000-2019

Source: Utah Department of Workforce Services

Nearly every industry has seen significant growth across the past 20 years. The most significant gains have occurred in industries tied directly to population growth, such as construction, healthcare/social assistance and education.

It’s difficult to pinpoint growth specifically to the ‘tech’ sector as “tech jobs” are classified across several different industry sectors. Still, many of the new and growing tech companies fall under the professional/scientific/technical and information sectors and both of these sectors experienced significant employment growth in the past 20 years.

The manufacturing sector had the smallest growth, the 4% corresponding to an increase of nearly 800 jobs.

Figure 3: Industry Employment Share, 2019

Source: Utah Department of Workforce Services, QCEW

Figure 3 shows the current (2019) industry employment share amongst all Utah County employment. The largest industry shares are in educational services, retail trade, healthcare/social assistance, construction and professional/scientific/technical.

Figure 4: Industry Employment Share Percentage Point Change, 2000-2019

Source: Utah Department of Workforce Services, QCEW

Figure 4 (above) shows the net change in each industry’s employment share between 2000 and 2019. For example: in 2000, manufacturing accounted for 12.3% of the county employment and in 2019 it was only 7.3%, a decrease of 5 percentage points over the period.

Out of the five largest industry sectors in Utah County, two have lost employment share in the past 20 years (education and retail trade) while three (construction, professional/scientific/technical and healthcare) grew. Education has lost employment share due to many other sectors growing since 2000, even though it remains the county’s largest employment industry.

Both the healthcare/social assistance and construction sectors grew significantly. Both thrive because of Utah County’s significant population growth. This is expected to continue as the county’s population continues to grow. The Kem C. Gardner Policy Institute’s demographers have projected that Utah County’s population will be nearly equal to Salt Lake County’s population by 2065.

Figure 5: Major Industry Location Quotients, 2000-2019

Source: Utah Department of Workforce Services, QCEW

Figure 5 (above) shows the changes in location quotients of the top six industries since 2000. A location quotient is an industrial concentration measure in the area when compared to the nation as a whole. A location quotient of 1.0 means that an industry’s Utah County employment concentration is equal to that of the U.S. as a whole. Corresponding numbers above or below reveal more or less employment concentration.

The most notable Utah County industry change during the past 20 years is the increasing dominance of the information sector. Even though the information sector already started out with a high LQ of 2.0 in 2000, it still managed to expand its importance over the past decade. So has construction. Education has fallen below an LQ of 2.0 as the growth in education has not been as aggressive as it had been in the past. Manufacturing does not hold the same employment base in Utah County as it once did.

A useful measure of an area’s industrial employment diversity is the Hachman Index. This is a measure comparing the totality of Utah County industry employment against the national industry employment standard. The index is from 0 to 100 with higher scores corresponding to well-diversified economies and lower scores speaking to specialized economies. Utah County’s Hachman score hovers around 80. That score implies some Utah County specializations, such as in education, construction and tech development. Utah County is the state’s least industrially diverse urban county. Industrial diversity has its value when some industries falter, but to date, persistent population growth fueling Utah County’s economy has insulated the county’s economic fortunes.

In summary, Utah County’s economic changes of recent decades have contributed to employment growth, higher wages and a more diversified economy. These factors establish the county’s strong economic foundation and set the stage for continued prosperity moving forward.