Report: COVID doubts leading to slowdown of economic boom

August proved to be a slower month for economic growth in Utah, according to new data from the Eccles Economic and Business Surveys. The 500 households in Utah that were surveyed in August stated that they will spend around 2 percent more in the next three months versus the same period in 2019. However, that is down from the 6 percent spending increase respondents reported in June.

Meanwhile, the 1,000 businesses surveyed reported a decrease in inflation and a potential “skill gap” in the workforce.

“The slower spending growth suggests some concern and increased uncertainty about economic growth in the future,” wrote report authors Mac Gaulin, Nathan Seegert and Mu-Jeung Yang of the David Eccles School of  Business at the University of Utah.

The slower spending is concentrated in three areas — e-commerce, electronics and food at home — which have experienced higher-than-average expected spending over the past six months. Consumers saw higher prices for food, utilities and entertainment in August relative to June as well. Housing prices also remain high.

A large minority of respondents — 28 percent — also indicated that they are at least somewhat likely to quit their jobs in the next three months. Their top reasons included “low pay” and “better opportunities elsewhere” in terms of stability, flexibility, benefits and remote work. 

Businesses in the survey report that August showed a significant slowdown compared to July, likely due to increased uncertainty around COVID and its delta variant, and the related uncertainty in consumer demand.  Inflation risk decreased from July, with the exception of the construction industry, where inflation increased. Most businesses still expect steady growth over the next year.

Another interesting finding is that employers are still seeking qualified candidates. The research team asked businesses about a series of basic and social skills they are looking for in employees. Businesses responded that job candidates generally have about 80 percent of the basic skills employers are seeking. This “skill gap” between employer needs and potential employees has implications for both job creation and wages. Businesses report they would be willing to hire 10 percent more employees if they found candidates with 100 percent of the skills they are looking for.