Originally published in the Deseret News.
When a pebble falls into a shallow pool it creates a series of ever-widening circles cascading toward the edge. What was once smooth, still and stable changes to be undulating and unstable. Change the pebble to a boulder and a tsunami occurs.
The new year will bring plenty of pebbles, but will it also bring boulder-sized disturbances? I took a peek inside my crystal ball to find tsunami trends worth keeping an eye on in 2020.
A group of researchers from the University of Chicago, Northwestern University and Stanford University constructs an index of economic policy uncertainty. The index includes the number of news articles discussing economic policy uncertainty from 10 large U.S. newspapers, a list of temporary federal tax code provisions set to expire, and the dispersion between the forecasts of professional economists.
Beginning in about 2015 the economic policy uncertainty index started a precipitous rise. In August 2019, the index reached an all-time high. It has since dropped a bit, but still stands at elevated levels. Clearly, trade policy, presidential impeachment, Brexit, political unrest in Hong Kong, Middle East conflicts and labor shortages are creating a high level of uncertainty for the new year.
Net in-migration and apartments
Utah’s population growth continues to surge. Last year an estimated 24,987 more people moved into the state than moved out, marking the fifth consecutive year of net in-migration of over 20,000 people. I’m impressed by the level of net in-migration, but that’s not the story. Net in-migration has occurred in 28 of the past 30 years and topped 30,000 twice in both the 1990s and the 2000s. The real story is the form this new growth is taking. Utah is building apartments at a record pace.
In 2010, local government permitted 1,723 apartments. By 2018, the number of units permitted tripled to 5,185. Final numbers for 2019 are not yet tallied but through September the number of units has more than quadrupled over 2010 levels reaching 7,188. Analysts expect an unprecedented 9,000 units statewide by year-end.
It’s an open debate why so many apartments are being built, but the economics are clear — vacancies are low, absorption is fast, and rents are high. Housing affordability remains a challenge. A majority of the new apartment construction is in Salt Lake City. People in the Beehive State are living more compactly. It’s a tsunami trend I expect to continue.
Utah continues to urbanize. In the 1940s, 7 in 10 Utahns lived in one of Utah’s large urban counties of Cache, Davis, Salt Lake, Utah, Washington and Weber. Today, nearly 9 in 10 call these counties home. The Census Bureau ranks Utah as the eighth most urban state.
Utah is not alone in the urbanization trend. Our nation’s history is one of changing from a predominantly rural and agricultural nation to an urbanized and industrial nation. What makes Utah’s urbanization unique is our topography of high mountain valleys and limited private land. As we grow we struggle with congestion, air pollution and housing affordability. It requires careful planning and massive investment to preserve our life quality.
The world gets smaller every day and this is increasingly true for Utah. Nonstop flights take off each week from Salt Lake City to Mexico City, Calgary, Paris, Amsterdam, London and more. Utah exports $12 billion worth of products all over the globe each year and a worldwide missionary force from The Church of Jesus Christ of Latter-day Saints spans the globe.
A globalization trend worth watching is the surge in Utah’s foreign-born population. In 1990, Utah’s foreign-born population totaled 51,686. Today it’s quadrupled to 245,665 Utahns. As the global economy continues its thrust, Utah continues to welcome the world and diversify our population.
Other tsunami trends in Utah I’m watching are the growth in short-term home rentals, explosive Chinese visitor spending, youth vaping rates and growth in electric vehicles. 2020 promises to be a year of change.