UIRA Releases 2.0 Macro Economic Report, Optimistic Utah Manufacturers Could Return to Pre-COVID19 Sales Levels A Year Earlier Than Originally Forecast

April 4, 2021

Utah Industry Resource Alliance (UIRA), under CARES Act funding, released the second update of the in-depth economic study of the impacts of the COVID-19 induced recession on Utah’s manufactures: Using Market Demand to Manage Production Levels: COVID-19 Market Demand Analysis and Forecast for Utah Manufacturers 2021-2025 Issue 2.0

“Utah’s manufacturers are positioned to have more favorable economic outcomes than originally forecast in Version 1.0 of Using Market Demand to Manage Production Levels released in November 2020,” said Dr. Tulinda Larsen, Executive Director, Utah Advanced Materials and Manufacturing Initiative (UAMMI). “Utah’s economic performance, combined with mostly positive economic activity and improvements in logistics over the same period nationwide, places Utah’s manufacturers in good position for further recovery and growth over the forecast period to 2025. Moreover, other factors with relation to the virus itself and public policy are moving in a direction that fosters a higher level of economic activity over the forecast horizon.”

It is now expected that Utah manufacturers as a group could return to pre-COVID19 sales levels a year earlier than originally forecast, by late 2021 in the expected case and by 2022 in the more pessimistic low case. Version 2.0 of Using Market Demand to Manage Production Levels estimates higher levels of GDP for the forecast scenarios over most of the individual years.  Actual GDP for the year came in relatively close to the expected value, down 3.5% according to the Bureau of Economic Analysis

  • Sales performance in the state was up 8.2%, well above the change in sales for the nation as a whole
  • Employment dropped by less than a percentage point (-0.5%) while the nation’s fell 6.1%
  • The Conference Board predicts the strongest quarter of GDP growth to be the second quarter of this year, at 8.5%
  • Utah’s 2020 exports were estimated to have performed better than the nation as a whole, up by 1.7% to $17.6 billion
  • Despite predictions of a much larger downturn, the U.S. auto industry ended 2020 with an estimated decline of 15% in sales, compared to earlier forecasts of a decline of as much as 29%
  • Utah has demonstrated a strong level of resiliency, especially among its manufacturers, who have managed to increase employment in the sector and help make Utah one of the most successful states, from an economic standpoint, throughout the pandemic
  • Utah has demonstrated a strong level of resiliency, especially among its manufacturers, who have managed to increase employment in the sector and help make Utah one of the most successful states, from an economic standpoint, throughout the pandemic

The study considered three economic scenarios based on GDP growth:

Low—Significant 2nd wave, no vaccine available, infection rates continue to increase;
Expected— Vaccine found but not widely available, no 2nd wave, infection rates stabilize, society lives/works with virus;
High— Vaccine widely available, no 2nd wave, infection rates decline, society adapts to virus.

UIRA expects the economic return to growth in four phases: Containment, Recovery, Reset, and Growth. Under the low scenario, sales would not return to pre-pandemic levels until 2023. However, under the high scenario, a return to pre-COVID sales volume could happen as early as 2021.

The Utah Manufactures Association is hosting a PodCast on April 14 to review the results of the updated forecast.

When: Apr 14, 2021 12:00 PM Mountain Time (US and Canada)
Topic: MEP Utah Macro Economics Q1 2021 Report

Register in advance for this webinar:
https://zoom.us/webinar/register/WN_TPOGEDoYQeyUuIRHC8sfkg

The full report can be found at https://bit.ly/39HrxRs

About Utah Industry Resource Alliance (The Alliance)

Utah Industry Resource Alliance is the premier source for assessing needs and providing solutions available through public and private resources. The Alliance is part of the NIST (National Institute of Standards and Technology) Manufacturing Extension Partnership (MEP) program. We live and work in communities across the state. Our primary focus is to help Utah’s manufacturers thrive.

As part of the MEP, the Alliance pools the expertise of Impact Utah, Utah State University’s Utah Manufacturing Extension Service and the Manufacturing/Outdoor Products Support Hub, the University of Utah Manufacturing Extension Partnership (UUMEP), the World Trade Center Utah (WTC Utah), the Utah Manufacturers Association (UMA), the Utah Advanced Materials & Manufacturing Initiative (UAMMI), and the Utah Inland Port Authority (UIPA). This powerful team provides access to manufacturing specialists, application engineers and research professionals from the top organizations and universities in the state.

About UAMMI
Founded in 2015, the Utah Advanced Materials and Manufacturing Initiative (UAMMI) brings together public, private, community, industry and education partners to assure growth and sustainability of Utah’s advanced materials and manufacturing industry and maintain Utah’s leadership in this key global industry. For more information visit www.UAMMI.org